An FHA 203k rehab mortgage is great for fixing up a home that you’re considering buying and may even be used to make improvements to your primary residence with an FHA 203k refi. Many lenders offer the “FHA streamlined 203k rehab” loan which limits the amount of funds that can be used for the rehab project. Unlike a streamline 203k, the rehab process is allowed to take up to six months to complete. I’m very pleased that Mortgage Master Service Company is now offering the FULL FHA 203k program.
FHA 203k loans allow borrowers to add the cost to repair or improve the property to the base loan amount, essentially providing an all-in-one construction loan. For example, if a home in Maple Valley has a sales price of $350,000 and needs $50,000 in repairs/rehab cost, the loan amount will be based on $400,000.
The 203k loan covers a variety of home repairs, renovations, and improvements, including:
- Kitchen and or bathroom remodeling
- New appliances
- New roof
- New siding
- New windows
- New furnace or AC
- Finish basement or attic space
- Add square footage to existing dwelling
- Anything that needs to be done to bring the dwelling to meet minimum FHA required standards.
As this is an FHA loan, it offers the same minimum down payment (based on the sales price plus improvements) as a standard FHA loan (aka 203b) and allow credit scores of 640 or higher. FHA mortgages do have both upfront and monthly mortgage insurance premiums. This FHA program is available for owner occupied/primary residences, 1 – 4 unit homes. FHA 203k loans are subject to FHA loan limits. In the greater Seattle area, the 2014 FHA loan limit for a single family dwelling is $506,000. Click here for a complete list of FHA loan limits in Washington state for 2014.
This may be a great option for home buyers who have had a challenging time in this market! With an FHA 203k rehab loan, you can expand your home search to include fixer-uppers that you customize to create your next home.
If you are interested in an FHA 203k rehab mortgage for property located anywhere in Washington state, please contact me!