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FHA 203(k) Rehabilitation Loans

What You Need to Know About…. FHA 203(k) Rehabilitation Loans. Presented By: Wanda T. Lindstrand. 4757 Highway 17 Bypass ∙ Myrtle Beach, SC 29577. What is an FHA 203(k) Loan?.

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FHA 203(k) Rehabilitation Loans

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  1. What You Need to Know About… FHA 203(k) Rehabilitation Loans Presented By:Wanda T. Lindstrand 4757 Highway 17 Bypass ∙ Myrtle Beach, SC 29577

  2. What is an FHA 203(k) Loan? This is a loan insured by the Federal Housing Administration and designed for the repair or renovation of existing homes in a purchase or refinance transaction.

  3. Types of FHA 203(k) Rehab Loans • FHA Streamline 203(k): Allows for the purchase or refinance of a home that needs minor repairs or rehabilitation up to a maximum loan amount of $35,000 in repair cost. • FHA 203(k): Allows for the purchase or refinance of a home that needs major rehabilitation or structural repairs. Minimum loan amount $5,000 up to FHA’s maximum county loan limits.

  4. Improvements Allowed • Structural Alterations & Additions • HVAC, Electrical, Plumbing • Well/Septic Systems • Termite/Moisture Damage • Roof, Gutter, Downspouts • Kitchen & Bathroom Remodeling • Flooring, Tiling, Carpeting

  5. Improvements Allowed • Interior/Exterior Painting • Interior/Exterior Lighting • Appliances • Siding, Windows, Doors, Trim Work • Foundation Repair • Decks, Patios, Porches • Driveways, Walkways, Retaining Walls, Fences

  6. Improvements Not Allowed • Improvements not Permanently Attached • Improvements for Business or Commercial • Landscaping: sod, trees, shrubbery • Luxury Items: Pools, Hot Tubs, Saunas, Gazebo’s, Barbecue Pits

  7. Eligible Property Types • SFR (attached or detached) • 2-4 Unit Multi-Family • Town House • FHA approved Condo • Modular • Manufactured

  8. FHA 203(k) Rehab Loan Benefits • Perfect for foreclosures, short sales, & HUD REO properties • Appraisal states repairs needed prior to closing

  9. FHA 203(k) Rehab Process • Borrower Signs Contract • Borrower gets itemized repair cost estimate from a licensed general contractor. • Borrower hires a FHA approved HUD Consultant • HUD Consultant & General Contractor review & agree on work & estimate of repair cost. • Borrower’s loan amount is determined based on total cost of repairs.

  10. FHA 203(k) Rehab Process • Borrower’s loan submitted to underwriting. • Appraisal ordered & repair cost estimate & HUD Consultant’s report submitted to appraiser. • Appraisal Received & loan amount adjusted if necessary based on value. • Close loan

  11. FHA 203(k) Rehab Process • Initial Draw to General Contractor to Start Construction • Final Inspection once construction completed • Final Draw to General Contractor • Residual funds applied to principal balance of loan.

  12. Property Requirements • Primary Residence Only • Existing home at least 1 yr old • Can only have 1 FHA loan; FHA will not insure more than one mortgage • Pest Inspection • Well Water Test Required on Home with Private Well.

  13. Statutory Limit • Maximum loan limit set by FHA which varies by county and municipality throughout the country. • Subject to change at any time • Higher for multi-family dwellings • Limits are available at: https://entp.hud.gov/idapp/html/hicostlook.cfm

  14. Maximum Loan Limit Chart Horry County Maximum mortgage limits based on the county and state of the subject property.

  15. FHA Web-sites • FHA Loan Limitshttps://entp.hud.gov/idapp/html/hicostlook.cfm • FHA Approved Condoshttps://entp.hud.gov/idapp/html/condlook.cfm • FHA HUD Homes http://www.hudhomestore.com/Home/Index.aspx

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