How an FHA 203k Loan Can Get You the Home of Your Dreams

How an FHA 203k Loan Can Get You the Home of Your Dreams

When most people look for a new home, they want a ready to move into property. The cost of having to fix and renovate a home can seem daunting. What if you could get a loan, though, that covered both the cost of the home, as well as the cost of repairs?

The FHA 203k loan is used to encourage lenders to fund what might be considered ‘risky’ home purchases. The purpose is to revitalize neighborhoods and drive more home ownership opportunities.

There are two types of FHA 203k loans: regular and streamlined. A regular 203k loan is for homes that need structural repairs, while streamlined are for homes that have nonstructural needs.

While the credit requirements vary, eligibility is considered more flexible and as little as 3.5 percent down payment is required on a purchase or up to 97.75%  loan to value on a refinance.

So, what kind of homes and repairs can qualify you for a FHA 203k loan? You first must plan to live in the home you are repairing. Then, if you have any of the following types of residence, you qualify:
• Tears-downs (foundation must remain)
• Existing construction of at least one year
• Single-family, two-family, three-family or four-family dwellings
• Condos (if they have been approved for FHA loans)
• Mixed-used property

Which repairs qualify? Below are some of the repairs that qualify. If you would like the full list please click here and download it.
• Disability access
• Plumbing
• Finishing an attic or basement
• Roofing and flooring

FHA 203k loans are great ways to build and design the home of your dreams, especially if a brand new home is out of your price range. If you have any more questions or are interested in applying for the loan, please give me call at 402-301-4500 or send me an email at terry@terrywilliams.com