Thinking of purchasing a home that’s in need of major repairs or renovations? There are a few perks that come with choosing a fixer upper:
- Less competition
- More affordable way to buy in your preferred neighborhood
- Opportunity to customize to your needs
- Potential to build thousands in equity.
If you’re up for putting in a little extra work, planning and time, buying a home and fixing it up can be worth it!
And when it comes to financing your fixer upper, consider an FHA 203K home renovation loan. 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 large or small upgrades before or as you move in.
Benefits of an FHA 203K Loan
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%.
Purchase a Fixer Upper
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 addition or adding a second floor
- Major remodeling that requires structural changes
- Foundation or other structural repairs
- Repairs or improvements that take over six months
Refinance with an FHA 203K Loan
Thinking of upgrading your home and enjoying the benefits of refinancing at the same time? By consolidating the costs of home repairs into your 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 like:
- 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
Connect with a PrimeLending Loan Expert
Have questions about getting started on your FHA 203K home loan? A PrimeLending loan expert can help guide you through the process whether you’re purchasing a home or refinancing and making repairs on your current home. Find a loan expert near you today to get started.