January 20, 2015
Recently we posted about the FHA 203(k) rehab programs. Did you know there is an option for borrowers who want to take advantage of an FHA Streamline loan but don’t have extensive repairs to do? This option is known as the FHA Streamlined 203(k), and is described on the FHA official site as follows:
“FHA’s Streamlined 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser.”
“Homeowners can make property repairs, improvements, or prepare their home for sale. Homebuyers can make their new home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet.”
The FHA provides a list of improvements and repairs that can be accomplished under this program, which include (but may not be limited to) the following:
Repair/Replacement of roofs, gutters and downspouts
Repair/Replacement/upgrade of existing HVAC systems
Repair/Replacement/upgrade of plumbing and electrical systems
Repair/Replacement of flooring
Minor remodeling, such as kitchens, which does not involve structural repairs
Painting, both exterior and interior
Weatherization, including storm windows and doors, insulation, weather stripping, etc.
Purchase and installation of appliances, including free standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
Accessibility improvements for persons with disabilities
Lead based paint stabilization or abatement of lead based paint hazards
Repair/replace/add exterior decks, patios, porches
Basement finishing and remodeling, which does not involve structural repairs
Basement waterproofing
Window and door replacements and exterior wall re-siding
Septic system and/or well repair or replacement
For the Streamlined 203(k) program the FHA official site advises:
“Given the need for homeowners to make minor repairs without exhausting personal savings, and in consideration of the increasing cost of materials, the minimum repair cost of $5,000 is eliminated and the ceiling is now raised to $35,000. This revised maximum repair/rehabilitation amount recognizes the cost of making older homes more energy efficient. Note that…when the repairs exceed $15,000, the mortgagee must perform or obtain an inspection to determine that all listed repairs were completed.”
The FHA Streamlined 203(k) program may not be available from all lenders–a participating lender would have to be willing to offer the 203(k) program to a qualified borrower in order to begin the process–speak with a loan officer to determine if the financial institution of your choice is willing to offer loans under this FHA-backed program.
Do you have questions about FHA home loans? Ask us in the comments section. All comments are held for moderation.
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.
Browse by Date: