With an FHA 203k loan can I remodel or improve? Yes, any or all of the following:
- Repair a kitchen
- Add a deck or patio
- Insulate for greater energy efficiency
- Replace flooring i.e. tile, carpet, etc.
- Add a bathroom, replace a bathroom
- Finish a basement
- Replace windows (for which you can get a nice energy credits well)
- Replace Appliances i.e. stove, furnace, and water heater energy credit
- Add central air (again energy credit here)
- And Much More
Minimal Down Payment and Closing costs:
- Down payment less 3.5% of Sales Price
- Gifts are allowed
- Seller can credit up to 6% of sales price towards closing and prepaid costs.
- No reserves required.
- FHA regulated closing costs
What can’t you do with an FHA203k mortgage loan?
- Put in a pool or an ice skating rink
- Add a Theater Room and all the equipment (you could get away with the room)
- Any other Luxury item, such as gold plating the baseboards
- Putting in a yard
So what do I have to do to get one of these FHA 203k loans?
There are some hoops to jump through to qualify:
- Owner/occupants only no flipping or investors (and no you don’t have to be a 1st time home buyer to qualify)
- The house must have been completed for at least 1 year, no new construction houses, sorry
- You will need to have 2 appraisals (one for the as-is value now and one for the projected value once the work is completed)
- You must identify the repairs and work to be done, and have a written estimate of materials and labor by a licensed contractor and an interior plan of the home.
- Repairs and addition must have the proper permits, inspections and be done to code
- And most of all..you must be able to qualify for the finished product (cost of house + rehab money), so you can’t buy that million dollar fixer upper folks, sorry..well unless you can afford that million dollar home.
- You must still have your 3.5% percent down payment for the entire purchase price (home + rehab money).
Hello, my name is Brian Quigley and I have been in the Denver mortgage industry since 2003. I have been fortunate enough to choose this very rewarding mortgage broker career and help thousands of borrowers over the years. Customer satisfaction is important to me most, and getting my clients to the closing table smoothly. Read More…