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An FHA 203(k) Mortgage is a
mortgage and home improvement loan all in one. If you
qualify for a traditional FHA loan, you may be able to buy
or refinance a property that needs renovation, repair or
remodeling and easily finance both the purchase and the
improvements in one easy step with a low 3.5% down payment.
When a homebuyer wants to purchase a house in need of repair
or modernization, the homebuyer usually has to obtain
financing first to purchase the dwelling; additional
financing to do the rehabilitation construction; and a
permanent mortgage when the work is completed to pay off the
interim loans with a permanent mortgage. Often the interim
financing (the acquisition and construction loans) involves
relatively high interest rates and short amortization
periods. The Section 203(k) program was designed to address
this situation. The borrower can get just one mortgage loan,
at a long-term fixed (or adjustable) rate, to finance both
the acquisition and the rehabilitation of the property.
Click
HERE for more information about FHA's 203(k)
Rehabilitation Loan Program.
This program can be used
to accomplish rehabilitation and/or improvement of an
existing one-to-four unit dwelling in one of three ways:
• To purchase a property on another site, move it onto a new
foundation on the mortgaged property
and rehabilitate it.
• To purchase a property and the land on which the property
is located and rehabilitate it.
• To refinance existing loan and rehabilitate a dwelling
• Paint the house or add siding
• Add a porch, deck or patio
• Replace a leaky roof
• Put in new flooring, carpeting or tiling
• Conserve energy with new windows or appliances of your
choosing
Some Eligible Repairs
include:
• Remodel the kitchen or bath
• Renovate or add a room
• Update wiring, plumbing or heating |
