December 1, 2010
There are many types of homes available to buy with an FHA home loan. Some borrowers are looking for new or recently built properties, but others seek less expensive options. Some turn to fixer-uppers, houses that have been foreclosed upon and in a state of disrepair, or similar purchases that require some additional work to make them ideal living spaces.
The FHA understands the needs of the budget-conscious house hunter; but it’s also understood that a buyer might not be able to afford all the repairs, upgrades or improvements to a property as an out-of-pocket expense. That’s one reason for the FHA Streamline 203(k) Limited Repair Mortgage program.
The FHA Streamline 203(k) is designed to help a an approved FHA loan applicant finance up to an additional $35,000 into the FHA mortgage to make repairs or improvements including those listed by a home inspector or FHA property appraiser. These repairs must be done before the move-in date according to FHA requirements.
What kinds of repairs or improvements can be paid for using funds from the FHA Streamline 203(k)? Some, but not all of the repairs authorized include lead paint hazard abatement, minor remodeling that does not include structural repairs, flooring replacement, plumbing upgrades, repair or replacement of central air conditioning systems, basement waterproofing and many other improvements.
Streamline 203(k) funds can even be used to repair or replace septic systems and wells. Internal and external painting, appliance purchases and weatherization are also permitted. This FHA Streamline mortgage can also be used in conjunction with an FHA Energy Efficient Mortgage.
According to the FHA, this mortgage can also be used, “To insure the mortgage on a single-family housing unit sold from the HUD
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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