FHA 203(k) Financing

FHA's 203K program is an FHA insured home loan that allows the borrower to finance the cost of home repair or home rehab into the mortgage. The FHA 203k loan is available for both home purchases and for refinances.

This loan program is perfect for the Las Vegas Mortgage and Real Estate market along with many other markets hit by the current wave of vacant foreclosed properties.  Currently many homes in Las Vegas for sale are eiher bank owned foreclosures or short sale homes. In both of these situations the home may be in some state of disrepair, with the seller unwilling or unable to make the needed repairs to make the property marketable.  In fact, in many situations it may be impossible to finance one of these homes as most traditional mortgages require the home to be fully livable prior to closing. FHA 203k financing solves this problem by allowing the home to close prior to repairs being made.  After closing, funds are dispersed to make the needed repairs to the home.  If you are looking to purchase a foreclosure property, using an FHA 203k rehab loan can expand the number of homes that you may qualify for. In addition, since many other types of financing are not available for these homes, there will be less competition and more negotiating power for the buyer.

The FHA 203k program consists of two  types of loans; The Full 203(k) Rehab Loan and the Streamlined 203(k) Limited Repair Loan. The full 203(k) program if for more extensive repair, even full rehab of a home. You can include most types of repairs into the full 203(k) loan, even major structural repairs and room additions.

The most common type of FHA 203(k) financing is the FHA 203(k) Streamline mortgage. This loan provides money for more limited types of repairs. As the name suggests, for a Streamline FHA 203k the process is simpler and more effecient. For instance, on a full 203(k) loan, any work done will typically need to be examined by a HUD inspector, these inspections are generally waived for a streamline. An example of the types repairs that can be financed into the 203(k) streamline loan are as follows:

• Repair/replacement of….
  • Roofs, gutters, and downspouts
  • Upgrade of existing HVAC systems
  • Upgrade of plumbing & electrical systems
  • Flooring
  • Exterior decks, patios, porches
• Minor remodeling (no structural)
• Painting – interior/exterior
• Window & door replacement
• Weatherization – including storm
• windows/ doors, insulation, weather
• stripping, etc
• Purchase & installation of new appliances
• Disability access improvements
• Lead based paint stabilization or abatement of lead-based paint hazards
• Exterior wall re-siding
• Septic system and/or well repair or replacement  
• Basement finishing/remodeling, which doesn’t require structural repairs.
• Basement water-proofing
   

  If you have questions about FHA 203k financing or would like to get prequalified, call or contact us.