It’s not very often when we’re able to sing the praises of a giant federal government program. But when it comes to helping people become successful homeowners, we can.
Home loans backed by the Federal Housing Administration (FHA) have helped millions become homeowners. People who might not otherwise have been able to purchase a home. But what about a house that calls for repair, renovations or remodeling – whether you already own it or are looking to purchase?? Fortunately, when your home needs some work, once again the FHA steps up to the plate with the FHA 203K renovation home loan program.
This program offers two types of loans that allow you to combine the costs of home remodeling or renovation into your mortgage for one single loan. You can use it to refinance your current mortgage, or to purchase an older home that requires that requires large or small upgrades before or as you move in.
Benefits you’ll be grateful for.
The FHA 203K renovation loan offers great benefits just like a regular FHA loan. There are more flexible credit qualifications to get approved. You can borrow up to the value of the property plus the repair costs, or up to 110% of the estimated property value after the repairs are complete. For a new home purchase that requires repairs, there’s a low minimum down payment requirement of only 3.5%.
If you want to fix up your current home, you can do a 203K refinance. There’s no appraisal fee and you can roll closing costs into the loan. And in addition to getting money for home improvements, refinancing almost always gives you a better mortgage. You could get a lower interest rate, a shorter term, or switch from an adjustable rate mortgage to a stable fixed rate.
If you want to fix up and refinance your current home, do an FHA 203k refinance.
What could be better than upgrading your home and enjoying the benefits of refinancing at the same time? By consolidating the costs of home repairs into your home mortgage you’ll still only have one easy monthly payment, not a separate construction loan. The Streamline 203k refinance can be used for a wide variety of projects that can protect and enhance your home’s value. Everything from ordinary repairs common in older homes, to cosmetic changes that will give your home a fresh look. There’s no minimum loan amount requirement and you can make up to $35,000 in non-structural repairs.
- Replace or upgrade your plumbing, electrical, heating or cooling system
- Insulate your home for greater energy efficiency
- Repair or replace your roof or gutters
- Refinish or waterproof a basement
- Get new windows, doors or floors
- Redesign your kitchen or bath
- Buy new appliances
- Add a deck
- And more!
For major repairs or to purchase a fixer-upper, choose the Standard FHA 203k.
With the Standard 203k you can really transform your home. It’s designed for larger projects and anything that requires structural repairs. There’s a minimum loan amount set at $5,000. You can borrow up to the value of the property plus the repair costs, or up to 110% of the estimated property value after the repairs are complete. So what qualifies?
- New construction, like a room additions or adding a second floor
- Major remodeling that requires structural changes
- Foundation or other structural repairs
- Repairs or improvements that take over six months
It all works, “thanks” to the federal government.
An FHA 203k renovation loan can provide you with the funds required to pay for the work you want done, and the money needed to cover the price of the home, either through refinancing or for a new purchase. The FHA doesn’t actually make the loan, but insures or backs it up for a private lender, like PrimeLending, who actually lends you the money according the guidelines established by the FHA. It’s a perfect example of the government doing well.
The 203k renovation loan helps build communities by expanding homeownership. It strengthens communities by improving and protecting home values. And it helps keep communities healthy by preserving and rehabilitating older homes. When it comes to being able to own and improve our homes, low down payments and easier credit qualification, this is one area where we can say “Thanks” to the federal government.