FHA 203k Rehabilitation Loan

Here are some of the highlights and

guidelines of the FHA Rehab Loan

•  Limited Repair
•  All standard FHA guidelines apply. 
•  Allows borrowers to finance improvements/upgrades up to $35,000 into mortgage before move-in
•  May be purchase or refinance 1-4 family single family residences
•  Including HUD REO property
•  Cash-out refinances not allowed
•  Fixed or adjustable rate
•  Borrower & credit eligibility same as FHA programs
•  Energy Efficient Mortgage may be used in conjunction with Streamline (K)
•  One closing with rehab funds escrowed by Lender & disbursed as work is completed
•  Can be used to: Update homes, Correct health & safety issues, Pay for higher cost items – roof, etc

ELIGIBLE IMPROVEMENTS

• Repair/replacement of roofs, gutters and downspouts
• Repair/replacement or upgrade of existing HVAC systems
• Repair/replacement or upgrade of plumbing and electrical systems
• Repair/replacement of flooring
• Minor remodeling that does not involve structural repairs
• Painting, both interior and exterior
• Weatherization, including storm windows and doors, insulation, 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
• Repair, replacement, or addition of exterior decks, patios, and porches
• Basement finishing, remodeling, or waterproofing that does not require structural repairs
• Window and door replacements and exterior wall re-siding
• Repair/replacement of septic systems and wells

INELIGIBLE IMPROVEMENTS

• Major rehabilitation or remodeling, such as relocation of a load-bearing wall
• New construction, including room additions
• Repair of structural damage
• Repairs that require detailed drawings or architectural exhibits
• Landscaping or similar site amenity improvements
• Improvements that require a work schedule of longer than six months
• Improvements that require a payment schedule of more than two payments per contractor
• Improvements that result in work not starting within 30 days of loan closing
• Improvements that require the homeowner to be displaced from the property for more than 30 days  (Generally, the property should be habitable immediately after closing.)