For some, finding a home that checks off everything on your “must have” list can be difficult. It might not have enough living room space, the kitchen could need some serious work or you may just want to make general improvements. With an FHA 203k loan you can make much-needed repairs, upgrades and modifications to an existing home to check off everything on your list!
Learn more about what an FHA 203k renovation loan is, it’s benefits and how you can use it to create your dream home below.
What is an FHA 203k renovation loan?
The government-insured FHA 203k home loan helps borrowers who want to repair or remodel a primary residence using one loan. The lender rolls the money to finance a home and complete repairs into a single home loan, meaning one monthly payment..
The FHA 203k renovation loan gives eligible homeowners the power to finance major upgrades to their homes while keeping the costs as low as possible. You can gain access to a large amount of funding for repair and renovation while escaping duplicate costs of taking out more than one loan.
What are the benefits?
The FHA 203k renovation loan offers great benefits just like a regular FHA loan:
- Government insured
- Flexible credit qualifications
- Borrow up to the property value plus repair costs
- Budget-friendly, you can get a fixed rate with only a 3.5% down payment
Full/Standard vs Limited
Depending on the nature of your home’s improvement, there are two FHA 203k loan options to consider.
The full/standard option is best for modernizing older properties that need structural repairs or a major renovation. Some examples of updates with a full/standard include:
- Remodeling bedrooms
- Replacement or repairs to plumbing, roofing and floors
- Improving function, appearance, landscaping,
- energy conservation
- Safety and disabled accessibility
The limited loan option is designed to handle smaller projects with a quicker turnaround. The cost of renovations can be up to $35,000 and can cover minor changes like:
- Fixing or replacing roofs, gutters, flooring, decks, patios, windows and other similar options
- Update existing HVAC, plumbing or electrical systems
- Remodel or finish a basement or kitchen that doesn’t require structural work
- Painting and weatherizing
- Improving disabled accessibility
Can I refinance with an FHA 203k loan?
If you’re considering a refinance and would also like to upgrade your home, consolidate the costs of home repairs into your mortgage and 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
Renovate with PrimeLending
No matter your renovation project, PrimeLending can help you finance it! Connect with a team member today to learn more about your renovation loan options today.