Basic information regarding 203k renovation loans:
While the FHA insured 203k programs (both Full and Streamline versions) are nothing new, enhancements to the Streamline version went into effect in October of 2008 due to Congress passing The Housing and Economic Recovery Act of 2008 in July of that same year.
The enhancements to this program are outlined in mtg letter 2005-
While the enhancements to this program are still relatively new, we believe that because this FHA program allows buyers to purchase homes with only 3 ½ % down (subject to the regional FHA maximum amount which is $346,250 for Maricopa County) and then include their improvements to the property within their original loan still subject to the regional maximum loan amount, this system of purchasing (and refinancing existing) homes will soon be much more widespread as we can attest to first hand that it’s usage is growing daily. This program allows for new paint, kitchens, flooring, and other cosmetic items to be included in the loan which overall will help to update those older homes and increase home values in neighborhoods across America as Congress had intended in addition to increasing civic pride.
The Streamline version of the 203k program does not allow any structural work to be done and is subject to a maximum amount of $35,000 worth of upgrades / repairs and this amount does include the contingency allowance so your true dollar amount to work with in the streamline version is more in the neighborhood of $31,500 but could be a little less depending on the contingency allowance required by the lender. In any case, one of the main guidelines for the maximum loan amount is still the maximum amount for which the buyer qualifies.
Full K renovations do allow structural work, room additions, etc.,. and are much more similar to regular construction loans in the sense that multiple inspections during the process are required.
The other great item regarding these loan types is the built-
Don’t be afraid of these loan programs! The bugs in the system have pretty much been worked out since it’s use was expanded this past October and we now have a number of these under our belt! This is a great opportunity for homebuyers to have that older home they want tailored specifically to their liking. And in most cases, this program actually allows for the lender to loan 110% of the renovated value of the property (the purchase price is added to the initial cosmetic / repair bid price and then the contingency allowance is also included).
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Also, due primarily to a little additional paperwork involved, these loans generally
require 45-
And lastly, since we are a direct distributor of flooring, paint, cabinets, and even have our own granite fabrication shop in addition to alliances with other partner general contractors across the state for those “Full K” Homes needing structural work in particular, there really is no need to look elsewhere for all of your 203 renovation needs.
Disclaimer: TDC Interiors is not a lender and does not claim to be! The above information is intended for informational purposes only and for more specifics on the 203 programs please contact your preferred lender.
