FHA 203(k) Rehabilitation Loans
The FHA 203(k) Rehabilitation Loan program is HUD’s primary mortgage program for the renovation and repair of single family homes.
Basically, it’s a mortgage and home improvement loan rolled into one. The Federal Housing Administration (FHA) bases the mortgage amount on the “as-is” value of the property plus the cost of repairs and renovations.
There must be a minimum of $5000 in repair work. If needed, there are some repairs which are mandatory such as insulation, smoke detectors, damage caused by wood-boring pests and moisture, septic tanks, well or water service, and elimination of health and safety hazards.
Other eligible repairs or improvements that can be done to meet the first $5,000 minimum repair requirement include:
Beyond these, virtually any other improvement can be made such as purchasing new appliances or repairing a pool.
Many additional costs can be financed into the FHA 203(k) Rehabilitation Loan such as:
Other expenses that can be rolled into the loan include the escrow for contingency costs. For structures that are over 30 years old, FHA requires between 10% and 20% of the cost of scheduled repairs to be financed into the loan and escrowed for repair work. If the dwelling is unlivable while the work is being done, then up to 6 monthly mortgage payments can be financed. The maximum amount of time allowed for the completion of repairs is 6 months.
How the Massachusetts FHA 203(k) Rehabilitation Loan Can Be Used:
The FHA 203(k) Rehabilitation Loan can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in Massachusetts one of three ways:
Call me for more details. Jeff Drew 508-941-5616 x202.
You can also go to FHA 203(k) Rehabilitation Loans to learn more.
** Star Mortgage is NOT a Government Agency