The FHA 203k loan amount has to include the price of the home plus the expected price of repairs. The homebuyer has to provide a percentage of the loan as a down payment. That percentage is usually far below that required by conventional loans and other FHA loans.
In order to apply, the loan applicant has to provide proof of income, proof of assets and credit reports. In addition, the applicant has to provide a home appraisal, including how much the home will be worth after the improvements are made. The applicant also has to present a detailed proposal of the work required on the home, including a cost estimate of each repair.
FHA 203k loans are offered by the Federal Housing Administration (FHA), a government agency. The federal government designed these loans to encourage lenders to fund seemingly risky home purchases. The goals of neighborhood revitalization and greater home ownership opportunities also drove the creation of this loan. FHA 203k loans are designated for houses that are damaged or sorely in need of rehabilitation. The loan covers not only the cost of the property but also the cost of necessary home repairs. The down payment requirement is low, and eligibility criteria are loose.
Homeowners whose homes need improvement can also refinance with these loans. A vast range of repairs, including room additions, bathroom remodeling, roofing, flooring and air conditioning systems can be funded with these loans.
It is these loans that make it possible for Property Made Perfect to make your dreams come true. See below for a list of allowable repairs and remodels that will qualify.
The FHA has specific guidelines as to which types of repairs qualify for 203k loans. The lender will also stipulate which repairs you can make. Allowable repairs include:Disability access, Heating, ventilation and air conditioning, Plumbing, Roofing, and flooring. Energy conservation, Kitchen remodeling, New appliances, Room additions. Decks and patios, bathroom remodeling, Room additions or second-story additions. New siding, finishing an attic or basement, and site grading.