The FHA Streamlined 203k Loan

A new loan has been introduced that eliminates some of the headaches of remodeling for homebuyers and homeowners.

The FHA Streamlined 203k loan is a rehabilitation loan program for less extensive repairs and improvement that has significantly less paperwork and delays than the original 203k loans available. Rather than deterring buyers and owners it actually encourages them to make minor restorations.

While it is typically meant for first-time buyers, homeowners can reap the same benefits.

What makes the loan so attractive for buyers is that it is figured into the buyer's original loan balance, resulting in one loan rather than multiple loans. Homeowners can refinance their mortgage through this program and it would include the repair costs, making the configuration of finances much simpler.

It is not meant for major renovations; rather, it is designed for quick, easy-to-estimate fix-ups that don't necessarily require a professional opinion. However, a borrower does have the option to hire an appraiser or home inspector.

Some of the approved renovations include: Roofing, flooring, plumbing, electrical, decks, basement completion, weather stripping, and energy efficient improvements.

A minimum loan balance is not required. However, repairs that exceed 35k are considered a part of the Full 203k loan.

Actually, there are only a few requirements that are necessary for a borrower to take part in the program (yet another perk). The FHA only asks that the renovations be completed within six months of commencement and work must start at most 30 days after closing on the house.

For more specific information on the Streamlined 203k loan program, you can go here.