The Federal Housing Administration has a new program called the 203k streamline limited repair program. FHA’s streamlined 203k permits homebuyers to finance up to an additional $35,000 to improve or upgrade their home before moving in.
The program also allows homeowners to upgrade their current residences by simply refinancing. Homeowners can quickly and easily tap into cash to pay for repairs or improvements or even new appliances.
As a rule, most lenders will not close a loan unless the property is in good shape and all repairs have been completed.
With an FHA 203k streamline, it is possible to close on a property needing repairs.
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If you are interested in an FHA 203k streamline loan to fix up or modernize a property, contact an FHA approved broker/lender. The Department of Housing and Urban Development Web site will help you find one in your area. Then seek a pre-approval from a 203k specialist.
Once homebuyers find a suitable property, they need to create a work write-up. This document shows the repairs they wish to complete and the cost estimates for those repairs.
When your broker/lender receives the work write-up, an appraisal will be ordered to determine the value of the home after repairs. While the borrowers are waiting for an appraisal, they can actually get bids on the work that needs to be done. They can then submit a final quote to the broker/lender showing how much they will need, including both the purchase price and cost of repair.
At closing, the seller will be paid for the property, and the repair money will go into escrow, where the new homeowner will have up to six months to complete the project.
The FHA 203k streamline program is used when there are no permits, plans or specs needed.
The eligible property must have been built for at least one year and can be a single-family dwelling, duplex, triplex or four-plex. Condominiums are allowed if the condominium project has been approved by the FHA.
At the end of 2008, there were more than one million homes for sale nationally that were bank owned.
Many are in need of repair that the banks will not do. With the FHA 203k streamline, the borrower can now purchase a property and complete the renovations.
This is a great time to buy with low rates and there is a $7,500 tax credit for first-time homebuyers.
Karen Blondin, a mortgage specialist with Blondin Mortgage Co., can be reached at (941) 365-1926.