203k loans for your home remodeling project

Over the years, it has been more difficult to obtain a loan for an extensive remodel. Through this loan, we have been able to get clients the money they need for the expansion, bathroom remodel, kitchen remodel, or whole house remodel that they have been dreaming of doing. While there are a few things that make this loan a few more steps for us contractors than a conventional home mortgage, we have worked through them by making this a simple process between you (client), your contractor, the bank and the consultant.

What is an FHA 203k loan?

The FHA 203k renovation loan program provides funds for both the purchase and renovation of a home packaged in a home loan. Once the home purchase is closed, renovation funds are held in escrow to pay for determined renovation work performed by approved renovation contractors.

Buying a home in need of repair is often a troublesome situation, because the bank will not loan the money to buy the home until the repairs are completed, and the repairs cannot be made until the home has been purchased.

HUD’s 203 (k) program can help you overcome this hurdle by allowing you to borrow funds to purchase or refinance a property plus the cost of making repairs and improvements on a mortgage. The FHA-insured 203 (k) loan is provided through approved lenders nationwide and is available to homeowners who will occupy the home themselves.

The down payment, credit rating, loan limits, and other requirements are the same as standard FHA loans. Additional specific guidelines are set for 203k loans to provide for home renovation.

What are the types of FHA 203k loans for home remodeling projects?

Standard 203k is designed for more complicated projects that involve structural changes, such as room additions, exterior grading, and landscaping, or renovations that would prohibit you from occupying the residence. A 203k standard is also used if your project requires engineering or architectural drawings and inspections.

The aerodynamic 203k is designed for less extensive upgrades and for projects that will not exceed a total of $ 35,000 in renovations and related expenses. This version does not require the use of a consultant, architect or engineer or as many inspections as the 203k standard. As a result, when appropriate, the aerodynamic 203k generally becomes the simplest and least expensive option.