Whether you're interested in buying a "fixer upper" at a bargain and renovating it to meet your needs, or your current home is in need of upgrades and new appliances, an FHA 203k home loan may be the best solution for you.
…a special Thank You to you and your 203(k) team for guiding me through this process. I can’t wait to begin renovations!
- Michael C., Maplewood
Unlike typical mortgage loans, the FHA 203(k) loan - a HUD insured loan - wraps renovation and purchase or renovation and refinancing costs into one fixed rate mortgage.
Only 3.50% down required for a 1-4 family purchase
One-time loan closing that covers 96.50% of the purchase and renovation costs
Ability to finance renovation or remodeling cost, rather than depleting cash savings upfront
Purchase a home that wouldn't normally qualify for a loan due to poor condition
Buy a perfectly move-in ready home and modernize it to meet your needs
Prospective buyers sometimes shy away from homes that need renovation because they cannot come up with the cash for anticipated home repairs - like a new roof, flooring or upgrades - in addition to a down payment, closing costs, and moving expenses. And since most lenders will not finance homes in need of repair, many home buying opportunities are left to “cash only” investors.
The FHA 203(k) mortgage loan was designed by HUD to address these issues, providing consumers with an attractive home financing program that has helped to improve America’s housing stock.
There are two types of 203(k) loans:
Streamline 203(k)- used for less complex "cosmetic" repairs with total renovation costs of up to $35,000
Standard 203(k)- used for more complex renovations with a total renovation cost of more than $35,000
FHA 203(k) loans are for Owner Occupied 1-4 unit properties only. Investment properties and vacation homes are not currently allowed ( for Investor & Vacation home renovation, click on the Fannie Mae HomeStyle Renovation on the left hand navigation).
It’s important to note that not all lenders who are familiar with standard FHA 203b loans know how to structure and prepare the necessary paperwork for an FHA 203k loan. Therefore, it’s extremely important that consumers deal with FHA 203(k) loan specialists only and not simply a lender that can offer this loan.
At American United, our dedicated team of FHA 203(k) lending specialists will guide you step-by-step through the FHA 203(k) process, making sure you are well informed along the way.
Homebuyers and Homeowners use an FHA 203(k) loan to;
Make changes for aesthetic appeal:
(New siding, adding a dormer, covered porch, attached garage)
Modernization of kitchen, bathrooms, finished basement
Mechanical repairs and/or upgrades:
(plumbing, heating, air conditioning and electrical systems)
Installation of well, septic system or connection to public utilities
Eliminate health and safety hazards
Repair Flood Damage
Roofing, Gutter Downspouts, Flooring, Tiling and carpeting
Major landscape and site improvement
Improvments to improve accessibility and functions for the disabled
Conversation of multi - family to single family (and vice versa)
Home knock down and rebuild
allowed if some of the original foundation remains
Find out if an FHA 203(k) Loan is right for you
Call or email a local American United Lending Professional today.