Mortgage Blog

When a homebuyer wants to buy a fixer-upper it usually involves conventional lending standards that include tough credit guidelines, 20% down, and 2 short-term loans often with high interest rates attached. Buyers’ finance the purchase and they finance the repairs. Then when work is completed they get one permanent loan that pays off the purchase and the repair loans.

The FHA 203k Rehab or FHA 203k Streamline loan was created to address these issues. FHA offers flexible credit qualifying and only one mortgage that includes both the purchase and repairs. The homebuyer gets one long-term fixed or adjustable rate loan with a low down payment to finance both the purchase of the home and the repairs. To provide funds for the repairs or upgrades the mortgage amount is based on projected value of the property when the work is completed.

Not every lender is FHA approved, and not all loan officers understand the FHA 203k process. I have extensive experience with the 203k program. Please contact me with any questions you may have.

For information from HUD: HUD FHA203k.