Buyer Tips, Featured, Featured Post, Government Programs, Home Improvement

FHA 203(k) Loans Offer Home Rehab Assistance

The Federal Housing Administration is offering a new alternative for homebuyers and homeowners called the FHA 203(k) program loan. This program allows homeowners to secure a loan for home improvements, provided the property has adequate value to secure the loan.

In order to qualify for an FHA home improvement loan, the property must be a residential home, one-to-four-unit dwelling that is older than one year. Condominiums can also qualify, but only for interior improvements.

Several items can  can be financed into the 203(k) loan, including permits, inspection costs, work write-ups, and supplemental fees. Other expenses that can be rolled into the loan include the escrow for contingency costs and up to six months worth of the proposed mortgage payment.

It is important to know that these FHA home improvement loans cannot be used for anything other than home improvement or repairs. The loan recipient cannot use the funds for other expenses like debt or other purchases. Specific improvement of the property such as roof repair or other major repairs/improvements are the only purchases that may be used with the funds.

FHA loans are typically easy to apply and qualify for.  The FHA guidelines for loan qualification are very flexible and typically require less than 5% down payment. This allows homeowners quick and easy access to home improvement funds at some of the lowest interest rates available.

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