How to Buy a Home and Finance Required Repairs
FHA Streamlined 203(k) - The Loan of Choice for Buyers and Sellers
FHA's Streamlined 203(k) program is just what you need in today's real estate market. If you are looking at Bank Owned/REO or HUD properties, you are aware many of these homes have damage that can cost additional funds you may not have. Instead of passing up these properties, why not let your FHA approved VITEK Mortgage Group Loan Officer show you how to take advantage of this opportunity. The Streamlined 203(k) program enables you to finance up to an additional $35,000 into your mortgage to improve or upgrade your new home before you move in. You can easily tap into cash to pay for repairs and improvements that your home inspector or FHA inspector finds.
The FHA Streamlined 203(k) also allows sellers to market their property in "as-is" condition and sell the home to FHA borrowers without making any repairs to the property - provided the that less than $35,000 in repairs is needed. It becomes a 'win-win' situation for both buyers and sellers.
FHA's Streamline(k) is intended to assist homeowners with basic repairs and was developed in response to the need for an easier and quicker purchase-rehabilitation loan alternative.
The Streamline(k) option does not replace the standard Section 203(k) program, but, delivers an alternative for those homeowners who seek to make the type of uncomplicated repairs which may be accomplished successfully without paid engineers, plan reviewers and/or architects.
Great for REO properties, the Streamline(k) requires no general contractor for the repairs to the home. Licensed or bonded contractors are required unless the buyer can sufficiently demonstrate to the lender that he/she has the necessary expertise and experience to competently perform the work. No inspection is required if the amount is less than $15,000, and all repairs can be completed after the close of escrow with loan proceeds.
Repairs under this program do not require documentation from the borrower other than written bids from appropriate licensed contractors. To ensure repairs under this program are expedited, Streamline(k) repairs are restricted to those repair categories such as those which do not require professional assistance to evaluate the need, feasibility or quality of work.
Eligible Work Items:
- Roofs, gutters and downspouts
- Plumbing and electrical systems
- Minor remodeling, such as kitchens, which does not involve structural repairs
- Window and door replacements and exterior wall residing
- Repair/replace/add exterior decks, patios, porches
- Basement waterproofing, finishing, and remodeling, which does not involve structural repairs
- Weatherization: including storm windows and doors, insulation, weather stripping, etc.
- Purchase and Installation of appliances: Ranges, refrigerators, washers/dryers, dishwashers and microwaves, which maybe free-standing
- Improvements for accessibility for persons with disabilities
- Existing HVAC systems
- Flooring
- Painting, interior and exterior
- Septic systems an/or well repair or replacement