Program Description
Found a house that needs… tweaking? We have just the product! This product is fantastic for minor repairs to update a home while being on a low budget. Financing repairs and appliances on credit cards or small loans can get very expensive! Why not put them in the mortgage so that they too can have a low interest rate and fixed payment? Here are some FAQs:
What types of repairs are eligible?
With the 203K Limited Renovation Mortgage, you can finance repairs and updates such as:
- Ridding of health & safety hazards o Repair or Replace wells and / or septic systems
- Connecting to public water & sewage systems
- Repairing / Replacing plumbing, heating, AC and electrical systems
- Making changes for better functionality and modernization
- Repair or install new roofing (provided no structural repairs are needed), siding, gutters and downspouts
- Make energy efficient repairs
- Create accessibility for persons with disabilities
- Installing or repairing fences, walkways and driveways
- Purchase and installation of a new refrigerator, cooktop, oven, dishwasher, built-in microwave oven
- Repair or remove an in-ground swimming pool
- Installing smoke detectors
- Installing, replacing or repairing exterior decks, patios & porches
- New flooring (carpet, tile, hardwoods)
And what repairs are ineligible?
Repairs that are NOT eligible for the Limited 203k:
- Converting a single family structure to a two-, three-, or family structure
- Decreasing an existing multi-unit structure to a one-to-four-family structure
- Reconstructing a structure that has been or will be demolished
- Structural repairs
- Landscaping & site improvements
- Tornado shelters
- Making additions or alterations to support commercial use or to equip or refurbish space for commercial use
- Making recreational or luxury improvements, such as:
- New swimming pools
- An exterior hot tub, spa, whirlpool bath or sauna;
- Barbecue pits, outdoor fireplaces or hearths;
- Bath houses;
- Tennis courts
- Satellite dishes
- Tree surgery
- Photo murals
- Gazebos
What is the downpayment requirement?
The minimum down payment is 3.5%. Reduced down payment option is available for HUD foreclosures.
What is the maximum loan amount?
There are a few different answers to this question. First and foremost, the maximum loan size will go off FHA’s maximum county loan limit. After this has been established, the maximum loan amount is 96.5% of the lesser of the two:
- The sales price or “As Is” value plus borrower paid repairs less sales concessions (inducement to purchase, not typical seller contributions), OR
- 110% of the “As Completed” appraised value (100% if property is a condo)
Can this be used on a refinance?
Yes! The maximum loan size is slightly more! The same requirements above but 97.75% is the maximum loan to value.
Is there a maximum amount of funds available to use for the renovation?
Yes! This amount is $35,000.
For more information on 203k Limited Renovation Financing Mortgage, give us a call!
