The FHA 203k is a renovation loan program where the borrower purchases or refinances a property, in as-is condition and rolls the cost of the renovation or rehabilitation all into one loan. There are two types of an FHA 203k loan. The first is a FHA 203k Full, or Standard. This version is used to purchase or refinance a home that needs major rehabilitation, or when the repairs are structural in nature. Next, the FHA 203k Limited, or Streamline, is used for uncomplicated, cosmetic repairs and renovation that does not require drawings or plans.
What are the Benefits of an FHA 203k Loans?
An FHA 203k Loan may be used to purchase or refinance a property that needs to be renovated or rehabilitated. There are two types of the FHA 203k Loan: FHA 203k Full (Standard) Loan and FHA 203k Limited (Streamline) Loan.
FHA 203k Full or Standard Loan
The FHA 203k Full or Standard Loan is used for the purchase or refinance of a home that needs major rehabilitation, or when the repairs are structural in nature. The standard FHA 203k loan is also used when the total renovation costs exceed $35,000. 3.5% down of both the purchase price and the renovation budget is required. This loan applies to primary residences only and work must be completed in 6 months by a licensed and insured contractor. A HUD Consultant will provide an added layer of protection to the borrower. FHA 203k HUD Consultants are experts in their field and are used to safeguard against under or over estimating the cost of the repairs. The HUD Consultant works directly with the borrower and contractor through the renovation phase.
FHA 203k Limited or Streamline Loan
The FHA 203k Limited or Streamline Loan is the version of the program used for uncomplicated, cosmetic repairs and renovations that are under $35,000 total including contingency, permits and any fees. Up to 50% of the contractor’s bid can be paid at closing towards material costs. Funds are paid out within 7 days of closing and the remaining 50% are paid when the work is complete and any required permits are signed off and submitted. 3.5% down payment is required for both the purchase price and the renovation budget. The FHA 203K Limited Loan can only be used on primary residences and the work must be completed by and approved General Contractor in 60 days. A HUD Consultant is required.
What are the FHA 203k Loan Requirements?
To qualify for either the FHA 203k Full or 203k Limited Loan a 640 credit score is required. The borrower must put 3.5% down and parish loan limits apply. Please click here or contact Kara Davis at 337-842-0115 for more information and to qualify for an FHA 203k Loan.
Kara Davis is a Qualified FHA 203(k) Lender
Kara Davis of Crew Lending is happy to help her clients with all of their FHA 203k Loan needs in Sulphur, Westlake, Lake Charles, and the entirety of Louisiana. For those looking to renovate or rehabilitate a primary residence through a purchase or refinance, Kara Davis can help! Click here or call 337-842-0115 with any questions you have on an FHA 203k Loan or how to get qualified!