What is the FHA 203k Loan?
December 15th, 2008
The 203k FHA mortgage is a unique loan that enables a new homebuyer to finance the purchase and rehabilitation of a house in the same home loan. A part of this FHA loan is used to pay off the seller and their mortgage lender. While the remaining FHA home loan amount is wired to an escrow account set up to fund the home remodeling and rehabilitation.
HUD has specific guidelines for these FHA home improvement loans have follows details:
- The house must be at least twelve months old.Â
- The cost of rehabilitation must be at least $5,000, but the total property value including the cost of repairs – must fall within the maimum limit for FHAÂ loans.Â
- The 203(k) FHA loan must follow many of the 203(b) eligibility requirements. Â
Talk to a FHA mortgage lender about specific home improvement plans, contractor structural guidelines and your eligibility as a borrower.
