The Streamlined FHA 203(k) loan is intended to facilitate uncomplicated rehabilitation or improvements to a home being purchased or refinanced for which plans, consultants, engineers and/or architects are not required. You will still need the services of a contractor as required.
FHA’s Streamlined 203(k) program permits homebuyers (purchase loan) and homeowners (refinance loan) to finance up to $35,000 into their new mortgage to repair, improve, or upgrade their home. The maximum of $35,000 was increased to cover renovation costs of making older homes more energy efficient. When the repairs exceed $15,000, the mortgagee must perform or obtain an inspection to determine that all listed repairs were completed.
Real World Scenarios for the We FHA 203(k) Streamlined Loan
In the past, homeowners and home buyers would have to apply for a second mortgage refinance loan or home equity loan to make cosmetic repairs and upgrades. They would have to credit qualify and have significant equity to use a line of credit or be forced take out cash savings for their repair needs. In certain real estate markets, this is no longer an option due to the current property values.
With the Streamlined 203(k) loan there is now the option of using one loan to buy the property and repair it, instead of your exhausting your savings or applying for a second separate loan for the repairs and updates. The We Streamlined FHA 203(k) mortgage loan is a great tool for updating your home, preparing your property to sale, or for purchasing a home and updating it with one single loan.
Homebuyers looking to get a deal on a property (1-4 units) needing a few repairs can use the Streamlined 203(k). It provides the funding solution to make things happen. With your We Pre Approval Letter in hand you can seek out that “almost perfect” house and make it your own. Since you can upgrade it immediately with one loan to purchase and fix, you can negotiate the seller‘s price down to cover the costs and have the flexibility of making your own selections.
If you already own the home, the preapproval letter will serve as a funding guide to help you plan your budget for weatherization, new exterior paint and other repairs.
Types of Repairs & Upgrades Allowed with the FHA 203(k) Streamlined Program
The FHA Streamlined 203(k) program includes the improvements described above and these repairs:
- Repair/Replacement of roofs, gutters and downspouts
- Septic system and/or well repair or replacement
- Repair/Replacement/upgrade of plumbing fixtures and electrical systems
- Lead-based paint stabilization or abatement of lead-based paint hazards
- Repair/replace/add exterior decks, patios, porches
- Basement waterproofing
Not sure if a project or repair is allowed?
Find out more about the Streamlined 203(k) program by discussing your needs with a We loan officer for more details and to secure your pre approval letter.