Mortgage Blog

FHA 203k Rehab Streamlined loan offered by the Federal Housing Administration can make the difference to homebuyers who don’t have a lot of money for improvements or repairs and don’t have the extra cash to upgrade.

FHA 203k streamline has gained popularity in the foreclosure market due to the following benefits:

• Low Down-Payment Financing*
• Up to $35,000 (including contingency reserve and 203-k fees) for improvements or upgrades
• Long Term Programs
• One Loan for Purchase and Repair
• Competitive Rates
• Can use the EEM (Energy Efficient Mortgage) and increase the loan amount

Not all lenders are approved by FHA to offer FHA 203k loan financing because FHA programs are more complex than traditional conventional mortgages. Homebuyers that want to buy their first home, or lower to moderate income home buyers that want to be owner occupants, and in need of up to $35,000 (including contingency reserve and 203-k fees), for repairs or upgrades should meet with a lender approved by the FHA and experienced working with FHA 203K loan program. The FHA lender will help borrowers learn what they qualify for and what repairs or improvements are eligible under the program.

Some FHA 203k Streamlined loan improvements or upgrades include:

• Stainless steel appliances
• Flooring
• Roofs gutters downspouts
• Heating, ventilation, and air conditioning
• Plumbing and electrical systems
• Exterior and interior painting
• Weatherization
• Decks, patios, fences
• Plus more!

It also helps to find a real estate agent that understands the 203k program when viewing properties to purchase. A knowledgeable real estate agent experienced in negotiating foreclosures and helping homebuyer’s select properties that are eligible for the repairs and upgrades will help make the FHA 203k home buying process run smoother.

To have a successful closing homebuyer’s must remember that they should not buy large items, or run their credit cards up, during the home buying process. Homebuyer’s should not purchase furniture, televisions, and cars until after closing on the home. They should not change jobs or quit a job. Try to keep your financial picture the same as when you applied for your loan.

FHA 203k is a great option for buying bank owned properties. Homebuyers can get one loan that includes funds they need to buy a home and fix it up. The rehab funds are placed in an escrow account and released as the work is completed. The down payment is minimal of the total cost and homebuyers don’t need perfect credit. More detailed information can be obtained by going to HUD and Minnesota Mortgage Today.

*As of August 13, 2011 30 yr fixed rate 4.25% with APR of 4.877% . This is not an offer to extend credit. Rate subject to change without notice.