Home Improvement Loans, Fha 203k Loan Rates

Home Improvement

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Home Improvement Loan

From minor fixes to major remodels, home improvements can better your quality of life and make your home more comfortable to live in. They may also increase or preserve the value of your home, making it more attractive to potential buyers when it comes time to move and sell. However, renovation projects can be costly and often require cash upfront making financing difficult for many homeowners.

Thankfully, there are several options that can aid borrowers in financing their home improvement projects. One such option is an FHA 203k home improvement loan. This loan is backed by the Federal Housing Administration and allows you to combine renovation costs with your mortgage, resulting in one loan with one closing.

With an FHA 203k home improvement loan, the amount borrowed is an aggregate of the home’s price along with an estimate of repair and labor costs. You can cash-out up to $35,000 for your home renovation projects and maintain a mortgage balance that exceeds the value of the home. And though FHA 203k loans are insured by the FHA, they don’t require borrowers to have an existing FHA loan to refinance into a 203k loan.

Benefits of an FHA 203k Home Improvement Loan

Purchase an Older Home

For buyers looking to buy and remodel or repair an older home in poor or less-than-ideal condition, an FHA 203k home improvement loan is a great way to secure a new residence or future investment.

More Buying Options

FHA 203k home improvement loans can help you expand your search to include homes you otherwise would be unable to afford.

Affordability and Simplicity

When you fold renovation costs into your mortgage, you simplify the borrowing process and put a cap on closing costs.

Cash-Out

FHA 203k home improvement loans allow for a mortgage balance that exceeds the home’s value and let borrowers cash-out up to $35,000.

FHA 203k Home Improvement Loan Options

FHA 203k home improvement loans come with varying terms and conditions and are available as fixed and adjustable-rate mortgages. The following are the two primary types of 203k loans

Streamlined 203k: This option is designed to cover smaller, less expensive home improvement projects such as ones not including structural renovations. It requires minimal paperwork and features a maximum repair limit of $35,000. The home also must be inhabited throughout the renovation period.
Standard 203k: A traditional 203k loan covers many home improvement projects including larger, more expensive renovations involving structural repairs. A minimum repair cost of $5000 is required and the maximum cost is limited only by FHA regulations for the home’s region.

FHA 203k Home Improvement Loan Qualifications:

FHA 203k loans cover many home repairs, though cannot be used for “luxury” improvements such as adding a swimming pool to your property. Eligible repairs include but are not limited to:

Kitchen and bath remodels
Windows and doors
Decks and patios
Flooring
Plumbing
Siding
Energy Efficiency Improvements
Heating and Air Conditioning Systems
Washers and Dryers

In order for a home to qualify for an FHA 203k loan it must fit the following criteria:

The home must be a one-to-four family residence that has been completed for at least a year
The home can have been torn down, though at least some of the foundation must still be in place
The home can be a residence that is set for relocation
The home can, under certain circumstances, be a condo, but not a co-op

Whether it’s a small addition or big structural renovation, Global Equity Finance can help you find the right 203k loan to finance your home improvement project

Give us a call today at 800−245−3279!