The 203K is an FHA program designed to renovate the inventory of existing homes. Its allows a buyer to purchase a less than perfect house and renovate it with a single mortgage that is based on the estimated value of the home after construction is complete.
203K Renovation Loan Details
Single Family Residential Homes Allowed
Advantages
- Allows repair/renovation costs to be rolled into the loan
- Major items are allowed (Foundation)
- Low down payment (3.5%) and seller can pay up to 6% towards closing costs
- Close before repair/rehab begins
- Only one closing. Money disbursed on a draw basis after closing as construction in completed
- Loan amount can go up to 110% of the “after improved value” from the appraisal
Items NOT Allowed
Any luxury item and or improvement that does not become a permanent part of the subject property is not eligible, including:
- Pools, hot tubs, barbecue pits, tennis courts
Comments or questions are welcome.
