FHA 203(k) Loan
Have you ever dreamed of turning a fixer-upper house into your ideal dream home? Do you favor older homes with character? In that case, as opposed to other home loan types, the FHA 203(k) home rehab loan could be just right for you. Are you finding up-to-date homes in the neighborhood you want slightly out of your price range, so you’re considering a fixer? Again, this particular FHA loan could be ideal.
This special mortgage is intended to finance the purchase and repair or renovation of a home. You’ll find many great homes that need repairs, or perhaps more than a little TLC, here in the Chambersburg area of PA. With the FHA 203(k), sometimes written FHA 203k, you can finance the home purchase and the repairs all in one convenient loan.
What is an FHA 203(K) Mortgage?
Backed up by the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (HUD). The FHA 203(k) is designed to make homeownership an easier task, even if the place you love is a little on the vintage side, slightly neglected, or in need of major repair work. The task of fixing up a property to reflect your preferences and personality can be very satisfying, although daunting for some. With this FHA loan, you’ll have what you need to tackle the project, including funds to hire construction and remodeling experts to fix up your chosen house to meet your specifications.
There are two types of FHA rehab loans. The Standard 203(k) is used for homes needing structural repairs or serious renovation. The Limited 203(k) covers cosmetic repairs and improvements more limited in scope, totaling less than $35000 for the work. Examples might include new appliances, a new roof, flooring, window replacement, and/or home painting.
FHA 203(K) Covered Home Repairs
To qualify for this FHA mortgage, the home improvement work your chosen house requires may include a new garage, landscaping, and/or structural repairs. If a house you’re considering needs a new kitchen, or the plumbing needs replaced, the FHA 203(k) can help. If the home has a shaky front porch or needs old DIY repairs redone for safety and code compliance, this FHA mortgage will provide just what you need. Repairs like adding a new deck or patio are also eligible for financing through your FHA loan.
You can even buy currently-uninhabitable houses (with no Certificate of Occupancy) with the FHA 203(k) mortgage. You can improve curb appeal with new siding or raise the property value by adding a room with this loan. Kitchen and bath repairs/renovations are also possible, as well as plumbing, flooring, roofing, and home heating/cooling system installation, or repair. But about that pool–this home rehab loan will not let you add a new in-ground swimming pool. If the home already has an existing pool, you can have any needed pool repairs done, however.
FHA-Eligible Property for the 203(K) Rehab Loan
Single-family homes, up to four-family houses (or four-plexes), are potentially eligible for the FHA 203(k). Nearly destroyed homes – with only the foundation remaining – can also be candidates for this flexible mortgage. Even if your home needs to be moved, the FHA may approve this for the 203(k). Some condominium units are FHA-eligible, however, co-op apartments are excluded. Your lender, real estate agent, and the FHA website should have up-to-date information on approved condo complexes in the local area.
How to Apply for an FHA 203(K) Home Loan
If you’re interested in the 203(k) loan, or need more information, the knowledgeable mortgage representatives at Homespire Mortgage can help. We believe in making the application process simple and stress-free for local residents in the Chambersburg area of PA. We serve multiple boroughs of Franklin County, including Greencastle, PA, Fayetteville, PA, Mont Alto, PA, Shippensburg, PA, Mercersburg, PA, and Waynesboro, PA.