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Renovation 203(k) Loans

Renovation or 203(k) Loans give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy, or a home that may not qualify to be purchased with another type of loan due to its condition. The down payment requirements are minimal and the kinds of repairs and upgrades you can do with the funds are comprehensive.

What Is A Renovation 203(k) Loan?

The 203(k) loan is an FHA loan that lets you purchase or refinance and rehabilitate a property with one loan closing. The projected rehabilitation costs are held in an escrow account and disbursed as work is completed and inspected. The loan amount is based on the lower of the projected market value following repairs or the purchase price plus renovation costs. These loans are backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. 

Streamlined 203(k) Loan

  • The Streamline 203(k) allows homebuyers to finance up to an additional $35,000 for repairs and improvements into their mortgage. Homebuyers can quickly and easily tap into cash to pay for the work on their property.

  • The following repairs can be financed with this program:

    • Repair/Replacement/Upgrade

    • Roofs, gutters and downspouts

    • HVAC systems

    • Plumbing and electrical systems

    • Flooring

    • Appliances

    • Well & septic

    • Windows & doors

    • Remodeling (w/ no structural concerns)

    • Kitchens

    • Bathrooms

    • Bedrooms

    • Basement

    • Additions

    • Solar panel installation

    • Exterior deck or patio

    • Swimming pools

    • Exterior and interior painting

    • Weatherization including storm windows and doors, insulation, weather stripping, etc.

    • Improvements for accessibility for persons with disabilities

    • Lead based paint stabilization or abatement of lead based paint hazards

    • Basement waterproofing

Full 203(k) Loan

  • The Full 203(k) permits homebuyers to finance an unlimited amount* for repairs and improvements into their mortgage. *The rehabilitation cost, although unlimited, cannot exceed the after improved value of the home including the sales price. Homebuyers can quickly and easily tap into cash to pay for the work on their property.

  • The extent of the rehabilitation covered by 203(k) loan may range from relatively minor ($5,000 to $25,000) to major reconstruction. It can also cover the conversion of a property of any size to a one- to four-unit structure.

  • The following repairs can be financed with this program:

    • Everything from the Streamlined 230(k) Loan list

    • Structural alterations and major reconstruction

    • Modernization and cosmetic improvements

    • Landscaping and other site improvements

    • Energy efficient improvements

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