Find! FHA Experts

FHA Home Loan Information
Apply for a FHA Loan
FHA Mortgage Rates
What is an FHA Loan
FHA vs. Conventional
FHA loan limits
FHA Mortgage Insurance
Required Documentation
FHA Closing Costs
Purchase vs. Refinance
FHA Streamline Refinance
FHA Refinance Loan
FHA Cash Out Refinance
FHA Hybrid Arm's
Hope 4 Homeowners H4H
FHA Jumbo Loan Program
Reverse Mortgages
FHA Secure Program
203-K Rehab Loans
203-K Streamline Loans
Find a 203-k Consultant
FHA Kiddie Condo's
Officer next door
Teacher next door
MIP Refund explanation
FHA HUD homes
Home Buying Guides
Message Boards
FHA/VA Blog
 
Get the answers to all your 'bottom line' questions on our Mortgage Calculators Page.
Website Awards
Business Links
Link Exchange
FHA Mortgage Leads
About Us
Privacy Policy
Equal Housing Opportunity.
Equal Housing Opportunity Logo 

 

  www.FHAinfo.com 
2692 Madison Rd. Suite N1 #249, Cincinnati, OH 45208 ---  Contact Us

Copyright © FHA Info 2001-2012
All Right Reserved

 

         HUD 203k Rehab Program           

FHA 203K Loan - Eligible Property:

To be eligible for the FHA 203k mortgage loan, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.

Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.

In addition to typical home improvement loan projects, the FHA 203-k mortgage loan program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be decreased to a one- to four-family unit.

An existing house (or modular unit) on another site can be moved onto the mortgaged property; however, release of loan proceeds for the existing structure on the non-mortgaged property is not allowed until the new foundation has been properly inspected and the dwelling has been properly placed and secured to the new foundation.

A 203-k mortgage loan may be originated on a "mixed use" residential property provided: (1) The property has no greater than 25 percent (for a one story building); 33 percent (for a three story building); and 49 percent (for a two story building) of its floor area used for commercial (storefront) purposes; (2) the commercial use will not affect the health and safety of the occupants of the residential property; and (3) the rehabilitation funds will only be used for the residential functions of the dwelling and areas used to access the residential part of the property.


What is the minimum amount of repairs required on a FHA 203k home improvement loan?

There is a minimum $5,000 requirement of eligible home improvement loan projects on the existing structure of the property. Minor or cosmetic repairs may be included after meeting the first $5,000 worth of repairs.

What are some of the repairs that qualify for the first $5,000?

Structural alterations and reconstruction: (Repair or replacement of structural damage, chimney repair, additions to the structure, installation of additional bath(s), skylights, finished attics and/or basements, repair of termite damage and the treatment against termites)

  • Elimination of health and safety hazards.

  • Changes for aesthetic appeal:
    (New siding, adding a dormer, covered porch, attached garage).

  • Air Conditioning or replacement:
    (plumbing, heating, air conditioning and electrical systems).

  • Installation of well, septic system or connection to public utilities.

  • Roofing, Gutter Downspouts, Flooring, Tiling and carpeting.

  • Major landscape and site improvement.

  • Improvements to improve accessibility and functions for the disabled.

  • What are the qualifications to be able to obtain a FHA 203-k loan?

    The qualifications requirements are the same as a typical FHA mortgage loan. The only additional item that the borrower needs is either enough cash reserved to pay for materials and labor until they are reimbursed through a draw, or a credit card with an adequate available balance. If there is to be a contractor involved, the contractor may choose to cover these costs.

    The interest rate on a typical FHA 203k mortgage loan is a little higher than a standard FHA or conventional 30/15-year fixed-rate loan. The cash requirements are the same as an FHA loan, 3 percent to 5 percent, which is less than a typical conventional loan. There are a couple of additional fees which pertain to the construction aspects of the FHA 203k loan.

    Can I pick my own contractor to do the work?

    You may decide on your own contractor, and they should be brought into the process in the beginning stage of the loan process. Check out the credentials of the contractor thoroughly, making sure he is knowledgeable in all aspects of rehabilitation work.

    The home improvements or repairs need not be made before moving into the property, depending on how extensive the repairs are and whether the house is habitable while the repairs are being made. The home improvement loan provides the ability to include up to 6 months of mortgage payments in the improvement escrow, should you not be able to occupy the property and have to pay rent during rehabilitation.

    { return to menu }


     

    How to Qualify
    Understanding fha loan credit guidelines
    Credit Guidelines
    fha loan income guidelinesIncome Guidelines
    overcome credit problems to get approved for a fha loanOvercoming Credit Problems
    FHA loan case studies


    Case Studies

    FHA loan underwriting


    What are compensating factors ?

    How much money do you need for a fha home loan

    How much money do I need?

    Where can you get Free down payment moneyWhere to get down payment money