FHA 203k Loans:
FHA Limited 203k Loan program permits home buyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser. Homeowners can make property repairs, improvements, or prepare their home for sale. Home buyers can make their new home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet. These repairs are done by a licensed contractor after the loan is funded. This is an excellent loan especially for instances where the seller refuses to do any required repairs that have to be done prior to the loan funding. This loan only requires only 3.5% down payment.
FHA 203k Loans fill a unique and important need for home buyers. When buying a house that needs repair or modernization, home buyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, the FHA 203k Loan offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. This loan requires only 3.5% down payment. FHA 203k insured loans save borrowers time and money.
FHA 203k insures mortgages covering the purchase or refinancing and rehabilitation of a home that is at least a year old. A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA Loan Limits for the area. The value of the property is determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.
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- Even though I mainly do FHA 203k Home Loans in Fresno CA, Clovis CA, Madera CA, and Sanger CA, I’m able to serve the entire state of California.