What is the Difference Between a 203k and a 203k Streamline?
The basic difference between a 203k and a 203k Streamline lies in the cost and scale of the home improvements you want to finance. Before we cover the details, let's look at the 203k loan program and what it does for home buyers and homeowners alike.
The FHA 203k allows a buyer to finance the home purchase and needed or desired repairs into one mortgage loan. This means the 203k is not a home equity loan or some other second mortgage or credit line. You as the buyer have one mortgage, one payment and it all enjoys the same tax benefits any other mortgage loan would.
The same can be said for homeowners looking to refinance and remodel their house. If you're looking to pay for a kitchen remodel, a bathroom upgrade or deck construction, you could refinance your mortgage into the FHA 203k and pay for a professional to do the work. You can see how this looks here: Before and After an FHA 203k
Those are the basics on the 203k loan overall. Now let's explore the 2 options within this home improvement loan.
The Full or Standard 203k covers home improvements more than $5,000; structural repairs; landscape grading and major repairs. So you could move a load bearing wall in your house, replace a termite damaged sill plate, fix your yard so the basement doesn't leak or add a bathroom or bedroom to your house.
If you're looking to pay for lighter renovations like new carpet or flooring, paint, siding, roof repair with gutters and downspouts or light kitchen remodeling, the 203k Streamline is the option you'll likely consider. This option doesn't cover structural work, but you can pay for almost anything else you'd like to upgrade in your house.
Here's a video that explains some of what you just read. National expert Joe Daly has a knack for breaking it down. Check it out:
See the embedded video here - FHA 203k Loan: Full 203k vs 203k Streamline
Maybe you've heard that 203k loans are terrible and difficult. Yes, historically they've proven to be difficult. But if you're working with an expert 203k lender you should have virtually no problems. 203k loans do take a little extra work and patience, but a remodeled house is probably worth it.
Now that you understand the basic difference between a 203k and a 203k Streamline, what other questions do you have? Leave your questions and comments below. We see them all, and we love to answer them.
You can also download the free eBook "FHA 203k Survival Guide" at the button below. This guide covers the 203k option more in depth than an article can. You'll learn more about what's covered and what isn't, the down payment requirement and how draws work - that's how the contractor on the job gets paid. Download your copy today and decide whether a Full 203k or 203k Streamline is right for your home improvement needs.