Rehab - Renovation Mortgage Loans
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FHA 203(k) Rehab and Home Renovation Loans
An FHA 203(k) loan is a type of government-insured mortgage that allows the borrower to take out one loan for two purposes – home purchase and home renovation. An FHA 203(k) loan is wrapped around rehabilitation or repairs to a home that will become the mortgagor’s primary residence. An FHA 203(k) is also known as an FHA construction loan.
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Who Is It For?
The FHA 203(k) loan encourages families in the low- to moderate-income bracket to purchase homes that are in dire need of repairs – especially homes that are situated in old communities. The program allows an individual to buy a home and renovate it under one fixed or adjustable-rate mortgage. The amount that is borrowed includes the purchase price of the home and the cost of renovation, including materials and labor.
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FHA Standard 203(k) Home Improvement Advantages
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Minimum 3.5% down payment.
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Borrow up to 96.5% of projected value after improvements are done.
FHA Standard 203(k) Home Improvement
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Mortgage Insurance Premium (MIP) required.
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Primary residence, owner-occupied homes only.
