What is the minimum amount of repairs required on a FHA 203k home improvement loan?

There is a minimum $5,000 requirement of eligible home improvement loan projects on the existing structure of the property. Minor or cosmetic repairs may be included after meeting the first $5,000 worth of repairs.

What are some of the repairs that qualify for the first $5,000?

Structural alterations and reconstruction: (Repair or replacement of structural damage, chimney repair, additions to the structure, installation of additional bath(s), skylights, finished attics and/or basements, repair of termite damage and the treatment against termites)

1.    Elimination of health and safety hazards.
2.    Changes for aesthetic appeal:
3.    (New siding, adding a dormer, covered porch, attached garage).
4.    Air Conditioning or replacement:
5.    (plumbing, heating, air conditioning and electrical systems).
6.    Installation of well, septic system or connection to public utilities.
7.    Roofing, Gutter Downspouts, Flooring, Tiling and carpeting.
8.    Major landscape and site improvement.
9.    Improvements to improve accessibility and functions for the disabled.

What are the qualifications to be able to obtain a FHA 203-k loan?

The qualifications requirements are the same as a typical FHA mortgage loan. The only additional item that the borrower needs is either enough cash reserved to pay for materials and labor until they are reimbursed through a draw, or a credit card with an adequate available balance. If there is to be a contractor involved, the contractor may choose to cover these costs.

The interest rate on a typical FHA 203k mortgage loan is a little higher than a standard FHA or conventional 30/15-year fixed-rate loan. The cash requirements are the same as an FHA loan, 3 percent to 5 percent, which is less than a typical conventional loan. There are a couple of additional fees which pertain to the construction aspects of the FHA 203k loan.

  203K Streamline Loan - Rehab Program Overview

The 203(k) streamline loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity, without the extra cost or details as found in the regular 203k.  One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

Made available to certain lenders by the U.S. Department of Housing and Urban Development (HUD), the FHA 203(k) streamline program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a current home. The FHA 203(k) streamline loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

      203K Streamline Eligible Borrowers:
          
1.    Owner Occupants - Purchase - Refinance
3.    Investors NOT allowed

      Types of 203K Streamline Loans:
         
1.    30 or 15 year fixed rates
2.    One year ARMS
    
      Eligible Properties:
          
1.    Single family dwellings
2.    Condominium
3.    Townhouse
4.    1-4 Unit buildings- you can increase or decrease the number of units with this loan.