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FHA 203K Home Repair Loans
The FHA 203K loan program was started to help revitalize properties for families to move into and live. These loan programs were specifically designed to help revitalize certain regions to help increase the affordability and general well beings for these under-appreciated areas. FHA 203K loan program has done wonders in the revitalization of neighborhoods and communities in desperate areas throughout the United States.
What is the maximum Loan to Value Limit with FHA 203K loans? These home improvement loans allow you to borrow up to 110% of the value of the home. The LTV is considered after the home repairs or rehabilitation of the home is completed.
The FHA does a current appraisal of the home to indicate the value prior to the repairs. They will consider all of the rehabilitation you plan to do and do a 2nd appraisal for what they the property with be valued at after the repairs are completed. If you install a solar energy solution, the FHA will insure up to 20% more of your mortgage value which allows you to get access to more cash.
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More families are restoring their homes with the FHA 203k incentives that help finance improvements. |
Is there a minimum amount I need to borrow to make home improvements under the 203(k) program? Yes. The FHA requires you to borrow at least $5,000 for repairs to the home in order to use the 203(k) program.
Are there certain repairs that are required by the FHA?Yes. The FHA requires you to meet current building standards for energy efficiency. If you are rehabilitating a home than these standards include:
- There must be ventilation in all crawl spaces & attics.
- Weather stripping is required on all windows and doors.
- All cracks and openings from the interior to the exterior of the home must be sealed.
- All outward facing walls and ceilings of the home must be insulated. The air conditioning, heating, and ventilation pipes & ducts must also be insulated.
- All bedrooms must have a smoke detector installed.
What types of homes can I purchase through the FHA 203(k) program? You can use the 203K product to purchase single family homes, up to 4 unit residences as long as you occupy one of them, and condominiums.
What improvements are allowed by the FHA?
The FHA requires you to make your home more energy efficient, but optional repairs that you can finance into your loan include:
- Repair to the structure of the home. This includes framing, chimneys, foundations, siding, new additions to the home, roofing and basement finishing.
- Repair or the new building of bathrooms.
- New windows or new skylights.
- Remodeling kitchens and installing new appliances.
- Any repairs that are needed for safety like mold removal or lead paint.
- Repair to internal systems of the home like electrical, plumbing, heating, air conditioning, and ventilation.
- All types of flooring repairs or new flooring.
- Repair or replacement of wells and septic systems
- Remodeling including new light fixtures, bathroom fixtures painting, and more.
- Outdoor improvements allowed: patios, decks, porches, landscaping, driveways and fencing
*Rehabilitation projects that are deemed necessary with accessibility reasons for disabled people are allowed.
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