Often an older home or one that needs repairs will come onto the market that has great potential but could use a little TLC. How can a homebuyer purchase one of these homes and afford the repairs? A 203K rehabilitation mortgage is just the thing!
This is the best product in the real estate finance industry hands down! It may not make you the most money, purchase prices can be on the low end. It definitely isn’t the easiest loan out there but there is no such thing as an easy loan anymore. And yes, there is more paperwork in a 203K.
That being said the 203K is the only loan that appreciates months after funding. The 203K takes a property that is not fundable by conventional means and makes it appreciate within months!
Many clients and Realtors we know have questions about this type of loan, for example what is the difference between a 203K Streamline and Full 203k? Well in a nutshell, here are a few key points:
Key points of 203K Mortgages:
- Not just for repairs
- Dated homes
- Remodel kitchen or bathrooms
- Razed homes
- Foundation repairs
- Pool repairs up to $1500
- Mold or Lead based paint
- Termite damage (cannot include the inspection)
- Energy Efficiency
- Maximum repair amount of $35,000
- Streamline is for small projects that involve 1 or 2 specialized contractors
- Any HUD, bank owned or vacant home is not eligible regardless of dollar amount
- Would not have a HUD consultant
- No maximum repair amount
- HUD approved consultant is brought in to do the inspection
- Consultant prepares write up for project after meeting with borrower and discussing borrower’s wish list and the items that need to be done to bring the home to HUD’s minimum property standards
- Borrower uses write up from consultant to find general contractor’s to bid the project.
- Accept bid from general contractor
This loan will take a little longer to close, depending on the scope of the work to be done. But what a reward to purchase a beautiful older home, get the repairs done and move into the home of your dreams!!
For more information on 203K Rehabilitation loans (Streamline K or Full K) contact me! We are in contact with a local 203K lenders with experience doing these types of transactions successfully!