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What is the FHA 203k?

 

What is the FHA 203k and what can it do for me?

what is the fha 203k peeling paintAt the end of the day, one of the most important questions we want answered as people is, "What's in it for me?" When it comes to real estate today, there's a program that covers home buyers and homeowners alike. Whether it's repairs or renovations on a purchase, or upgrades, improvements or redecorating the home you own, many projects can be financed through an FHA 203k mortgage loan.

Explaining the FHA 203k

AmeriFirst Home Mortgage Renovation Lending Program Manager Joe Daly has been in renovation lending for about 20 years. He's seen it all. Joe sat down with us to talk about what exactly the FHA 203k is, and how it can help you. Check out the short video below, or click this title: "What is the FHA 203k?"

Projects Covered by the FHA 203k

From repairs to renovations and upgrades to improvements, the FHA 203k covers a ton of work. Here's a list covering a few examples:

  • Roof repair
  • Mold / water damage
  • Lead-based paint removal/repair
  • Deck construction
  • Disability access
  • New paint
  • New flooring
  • Add a bathroom
  • Kitchen remodeling (including appliances)
  • Missing furnace

Some of the few things NOT covered would be luxury items like tennis courts, new pool construction (although filling in a pool can be covered) or a hot tub. The benefit is the affordable financing: for every $1,000 worth of work, you'll only pay about $6 a month more on your mortgage payment. The financing is part of your mortgage, so it's also part of your tax write-offs.

Want to learn more about the FHA 203k? Download the "Top 10 FHA 203k Topics" eBook below. It's yours to download, read and share.

(peeling paint house photo: 416Style from Flickr)

Comments

I have been a 203 K Consultant for over 18 years. I have over 3,800 under my belt to include the Stream Lines. I perform free seminars for brokers/agents and loan officers. I work in the WDC, Maryland, N VA, S PA, DEL, and Philly. If I can be of service...please order on line or call me: 443-829-4369. Thanks.
Posted @ Wednesday, August 03, 2011 2:16 PM by Sam Smargissi
Thanks for stopping by, Sam! Hope business is good. Cheers!
Posted @ Friday, August 12, 2011 9:33 AM by Dan Moyle
My house has zero or negative equity, but needs repairs and an addition. I've qualified for the 203K loan, but what happens with the negative equity situation?
Posted @ Wednesday, August 24, 2011 2:48 PM by Shari Joles
Shari, 
Since you can borrow 110% of the after-improved value of the house, you can get financing for more than what your home is valued at currently. However, if you're talking about refinancing your current property with no equity, you can refi for 97.75% of the 110% of the after improved value. If you have no current equity, you can't roll closing costs into the loan. So you will need to bring your cash-to-close to the table. For instance, if you owe $99,000 and the house is valued at $95,000 you would need to bring the other $4,000 to the closing table. 
 
In general, a buyer would need about 7%-10% equity in order to roll the cash-to-close funds into the loan. 
 
I hope that helps. You're welcome to email us for more information if you're looking for something specific: blog@amerifirst.com 
Cheers! 
Posted @ Thursday, August 25, 2011 1:08 PM by Dan Moyle
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