I bet you will have trouble getting a home improvement loan in today’s market without a lot of hassle. But there is a home improvement loan program that is certainly easier to get than any other. It is the FHA Home Improvement Loan. It is called the FHA 203K Streamline Loan and it can be used improve to buy a home that needs repairs with rehab costs of less than $35,000.
You can also refinance your current mortgage and use the loan proceeds to improve the home you are currently living in. The FHA Home Improvement Loan can be your answer to improving your home in one easy step.
The author of this article will discuss the basics of The FHA Home Improvement Loan.
FHA Refinancing – Need a Home Improvement Loan?
You hear it almost everyday that getting a mortgage is getting harder. One of the hardest loans to get right now is a construction or home improvement loan. Once again FHA is helping borrowers with their home improvement needs.
FHA has a program call 203(k) streamline. This program can be used for refinancing a current mortgage, or to purchase a home and make upgrades or repairs to the property all under one single loan. Unlike conventional mortgages it is not re-qualified, as it is only underwritten one time, upfront. There is no minimum amount for the repair cost; however the maximum is $35,000.
The FHA 203(k) offers both fixed and adjustable rate options, and the interest is the same as a standard FHA loan. On a purchase the appraisal is completed as "subject to" meaning after the repairs and or improvements are completed. On a refinance two appraisals are required. The first appraisal will reflect the current as is value. The second appraisal will reflect the subject to completion value.
Eligible properties include one to four unit residences, including HUD REO properties. Manufactured homes, and spot approval for Condos are also allowed. The property must be 100% complete – no partially built homes.
Contractors and repair criteria
All repairs/work must be completed within three months of the closing date. Repairs must be completed by a licensed contractor unless the borrower can demonstrate the required expertise. The contractor making the repairs does not have to be a licensed general contractor; however, he or she must provide a resume along with two references.
Self Help (borrowers completing work)
The borrower is required to have the necessary expertise and experience to complete the work in a satisfactory manner (ie: borrower is a licensed plumber and will complete that portion of the work). The cost of labor is included in the repair / rehabilitation cost in case the borrower is unable to complete the work and a contractor needs to be hired. The borrower must provide written estimates of the repair / rehabilitation cost as well as written estimates from the suppliers of the materials.
Author: D Clark See more FHA loans DClark Sr. Loan Officer Cole Realty and Lending, Inc http://www.midwestfhaloans.com
Article Source: http://EzineArticles.com/?expert=D_Clark
Comments: The FHA Home Improvement Loan is for home improvements, not for a complete rehab of the property. You read another great article on FHA 203K Mortgage here.
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