An FHA 203(k) loan offers a solution to that problem by simply rolling the cost of those home improvements into your loan transaction. Once you’ve had an evaluation done on the estimated cost of the required repairs our mortgage professionals can factor that into the total loan amount along with any additional renovations removing the need for a hefty renovation budget.
There are two different types of FHA 203(k) loans, Standard and Limited, and both loan programs are a 30-year-fixed-rate mortgage. Standard 203 (k) loans are for homes that need structural repairs, the addition of a room, a complete tear down (must leave foundation) or rebuild. Standard 203 (k) loans are also for repair costs that exceed $35k regardless of the type of repair. A minimum of $5,000 in eligible repairs is required, from upgrading appliances to major renovations (no luxury improvements, like pools or landscaping are allowed).
Limited loans are for houses that need non-structural repairs, like paining, purchasing new appliances, kitchen and bathroom remodel, flooring, and air-conditioning.