FHA 203K Streamline Loan

 

What is a 203(k) Streamline loan?

 

A 203(k) loan is an FHA loan used for the rehabilitation and repair of single family properties.  It is an important tool for community and neighborhood revitalization and for expanding home ownership opportunities.  It works like a construction loan to provide funds cosmetic improvements to a property.  It does NOT allow for any structural improvements to a property, such as moving of walls, addition of rooms, new driveway, etc… However, it does allow for basement refinishes.

The program will allow up to $35,000 for improvements, closing costs and contingencies.  50% of the construction funds are distributed at closing and the other 50% at completion of the project.  In most cases a General Contractor or professional contractors are required.

A 3.5% down payment by the homebuyer is still required.  But the final loan amount is determined by 110% of the final appraised value after improvements.

A 203K loan can be done as a refinance as well.  A homeowner can borrower up to 110% of appraised value after improvements.  The homeowner must have title to the property for 6 months in order to use the appraised value.  If the homeowner has owned the property for less than 6 months, the lender will provide up to 110% of the original purchase price.

For more information on 203K loans in Colorado and the steps in this process, please contact Tiffany Hughes at 303-549-0891.

NMLS# 197552 Powered by Mac5 Mortgage Inc. 199325

NMLS# 197552
Powered by Mac5 Mortgage Inc. 199325