Can I Use the FHA 203k on My Current Home?
The FHA 203k home improvement loan is proving to be a great opportunity for home buyers to find a fixer-upper for a good price and turn it into a dream home. But what about all the current homeowners with houses that could use a little TLC? With home equity loans hard to come by because of falling home values, paying for those remodeling projects can prove to be a struggle. Fortunately, the FHA 203k isn't just for purchases. The 203k can be used for a refinance and remodel.
From the kitchen to the bathroom, from the basement to the roof a ton of home improvement projects are eligible for financing under the 203k loan. You can pay for a kitchen remodel including new floors and appliances. You could add a bathroom to your house as your family grows. Old windows can be replaced with newer, energy efficient windows to save you on your heating and cooling bills. All of these home improvement ideas are covered for FHA 203k financing.
For every $1,000 in work you finance, you'll add about another $6 to your monthly house payment. So a $20,000 kitchen remodel might add around $120 a month to your mortgage. The nice thing is that it's one mortgage - not a second mortgage or a home equity line of credit that's due in full in 5-to-7 years. The FHA 203k amortizes the cost of the upgrades into the life of the mortgage. This also means the interest paid is tax deductible - you can't do that with a credit card.
Do you need to repair a driveway and keep the water from running straight into your basement? The Full 203k can help you pay for that. Septic and well problems are also covered. A new roof - no problem. The projects are nearly endless. A few thing not covered would be luxury items like an outdoor barbecue pit, a spa or pool or tennis courts. But if your home could use a deck, that's eligible for financing.
Another bonus to using the FHA 203k on your current home is that you'll be able to (in fact, you'll be encouraged to) hire professionals to do the work. The 203k is not a loan for the DIY crowd. On other words, your weekends and evenings won't be filled with getting the work done on top of your daily duties with family and work. It will be done by contractors who do this for a living.
So in short, yes the FHA 203k home improvment loan can be used on your current home. It's not just for purchases - it's for the current homeowner to refinance and remodel!
Learn more about this home improvement financing option with "The FHA 203k Survival Guide" at the button below. The free buyer's guide covers different apsects of the 203k from qualifying homes and projects to disbursements for paying the contractors. Get your copy today and see of the FHA 203k can be used on your current home.