203(k) Streamline FHA Rehab Loan

203(k) Streamline Rehab FHA Loan 

In short, this loan product can be either a purchase or a refinance type of loan. In either case, you're doing an FHA loan that is allowing for a minimum of $5,000 and a maximum of $35,000 in repairs to be financed back into the loan before construction begins. The loan is a very complex product and to properly advise someone of the suitability of the loan for them is best done in person or via a webinar. But here are some basic guidelines as they pertain to the loan product:

Key Points for 203(k) Streamline Home Loan 
 
  • Work must be done by licensed contractor (self help isn't allowed)
  • Must be US Citizen or Legal Resident
  • Non-Occupant Co-Borrower is allowed
  • Minimum Credit Score is 640
  • Structural Alterations are not allowed on this project. Allowable renovations/repairs include: Floor coverings, painting, roof, siding, repair/replace upgrade plumbing, weatherization, window replacement, basement finishing, repair and/or replacement of septic and well system, and the list goes on.
  •  10% contingency reserve must be included in the loan amount.
  • Appraisal will be completed based on "as is" condition and "as it will be condition."

With this loan product, an accurate estimate of the repair costs is critical to getting the right loan amount for qualification purposes. Identify a contractor you're comforable working with, they will make your life so much easier !!!