Q.
What is a 203k Loan?
A: The 203k loan is a loan that allows a borrower to purchase a home and finance the cost of any repairs the home might need. The loan amount is based on the "as finished" value of the home allowing the loan amount to exceed the purchase price of the property and include the estimated cost of repairs.
Q. Which properties are eligible?
A: Any one to four family home that has been completed for more than one year.
Any property the buyer wishes to convert either from a single family into a two to four family or from a two to four family into a single family.
A 203k can be used on a "mixed use" property that conforms to FHA Guidelines.
Condominiums that meet FHA guidelines provided the funds are used for interior repairs.
Q. What is the minimum amount of repairs required on a 203k
loan?
A: There is a minimum $5,000 requirement for the eligible improvements on the existing structure of the property. Minor or cosmetic repairs may be included after meeting the first $5,000 worth of repairs.
Q. What are some of the repairs that qualify for the first
$5,000?
A: Structural alterations and reconstruction (Repair or replacement of structural damage, chimney repair, additions to the structure, installation of additional bath(s), skylights, finished attics and/or basements, repair of termite damage and the treatment against termites)
- Elimination of health and safety hazards.
- Changes for aesthetic appeal:
(New siding, adding a dormer, covered porch, attached garage).
- Reconditioning or replacement:
(plumbing, heating, air conditioning and electrical systems).
- Installation of well, septic system or connection to public utilities.
- Roofing, Gutter Downspouts, Flooring, Tiling and carpeting.
- Major landscape and site improvement.
- Improvements to improve accessibility and functions for the disabled.
FHA,
VA & Conventional Loans