Do you need a Rehab Loan Program from an FHA approved lender.
The FHA 203(k) streamline program is the Federal Housing Administration’s primary program for the rehab loans for single family dwellings. The FHA 203 (k) Rehab loan program allows
The FHA 203 (k) Rehab loan program highlights:
· Allowed on purchases and refinance transactions for single family dwellings including those where the property is owned free and clear.
· Can be used for the repairs and improvements on purchases of HUD homes.
· Basic repairs cannot exceed $35,000. Only two draws will be allowed.
· Owner occupancy required. 1-4 Units (Existing property must be at least one year old)
· Fixed 30 year term only; no buydown option available.
· All repairs and improvements must be completed within 6 months.
The FHA 203(k) Rehab loan includes the following steps:
- A potential homebuyer locates a fixer-upper and executes a sales contract after doing a feasibility analysis of the property with their real estate professional. The contract should state that the buyer is seeking a 203(k) loan and that the contract is contingent on loan approval based on additional required repairs by the FHA or the lender.
- The homebuyer then selects an FHA-approved 203(k) lender and arranges for a detailed proposal showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project.
- The appraisal is performed to determine the value of the property after renovation.
- If the borrower passes the lender's credit-worthiness test, the loan closes for an amount that will cover the purchase or refinance cost of the property, the remodeling costs and the allowable closing costs.
- At closing, the seller of the property is paid off and the remaining funds are put in an escrow account to pay for the repairs and improvements during the rehabilitation period.
I have successfully used the FHA 203(k) Rehab loan program in partnership with a nonprofit organization, such as the Nehemiah Program (down payment assistance) to rehabilitate properties in
To sum up my comments,
If you have questions about the FHA 203(k) Rehab loan program, we suggest that you get in touch with us to learn more. Scott Teigland --612.919.2119
If you found this information helpful, send me your comments or contact me at scott@uptownfinancial.com ; 612.919.2119
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