As many long-term homeowners know (and recent homebuyers often learn), remodeling a home can dramatically improve its livability and value.
Whether it’s upgrading your kitchen, improving your bathroom, or removing a wall, remodeling can transform a home into your dream home. And the 203k loan can make it happen!
The 203k loan combines the cost for the home purchase (or refinance) with the cost of construction. This provides recent homebuyers and existing homeowners with financing to perform home remodeling and repairs.
Many homebuyers realize their home needs improvements after moving in
During the homebuying process, it’s normal to love a home after touring and purchasing it, only to learn that it needs improvements after moving in. Or you might love a home and want to buy it, knowing that you want to remodel it.
After several years in the home, you may decide that your home doesn’t quite fit your needs anymore, and that remodeling could make it much more livable.
In any of these situations, a 203k loan is an excellent choice. There are two main types of 203k loans:
- The Standard 203k is for projects costing over $35,000 and/or needing structural changes, including moving walls, replacing plumbing, adding a new garage, decking, adding a 2nd story, or landscaping.
If your home will be uninhabitable during the renovations, the Standard 203k loan is required, and there is a $5,000 loan minimum.
- The Streamlined 203k is meant for repairs under $35,000, such as adding new roofing, installing new appliances, interior and exterior painting, weatherization of windows and doors, and replacing existing flooring.
With a Streamlined 203k loan, your home is required to be habitable during the renovation period, and there is no loan minimum.
The 203k loan is a FHA-backed home loan, and it follows eligibility requirements of a standard FHA mortgage. You’re required to have a home appraisal, and the remodeling work generally must be performed by licensed professionals.
Contact me to learn more
To learn more about this exciting loan, please contact me today!