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Renovation Loan Program

FHA Limited 203K

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FHA Limited 203K General Guidelines

  • Both Purchase & Refinance Allowed
  • Refinances require 2 appraisals (As Is & After Improved Value)
  • This loan allows a customer to finance the purchase price, or the existing balance, and the cost of improvements into one loan amount.
  • The loan amount is determined by using the after improved value.
  • Can lend up to 110% of after improved value up to FHA allowed loan limits (Minimum required down payment 3.5%)
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Benefits of a FHA Limited 203K

  • One-time close fully amortized loan program
  • All Renovations are completed after closing by the buyer/homeowner selected Contractor.
  • Up to 50% of repair budget at or after Closing as an initial deposit to buyer/homeowner selected Contractor.
  • 1-4 units and mixed-use properties, Owner occupied only
  • Buyer/homeowner desired repairs allowed; Livability, Health and Safety repairs required (no luxury items or structural repairs allowed)

FHA Limited 203K Additional Info

  • Minimum 10-20% contingency may be required for additional health and safety issues at lender discretion (the program doesn’t require it)
  • $35,000 maximum allowed Total Renovation Costs (includes base budget plus all financed contingencies, inspections, and/or fees)
  • No minimum required renovation budget (minimum required repairs will be at lender discretion if required)
  • No 203k/HUD Consultant Inspector required (Consultant may be used for inspection but their fee can’t be financed)
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More About FHA Limited 203K

  • No structural repairs – limited to mostly cosmetic work, appliances & modern upgrades (no foundations or load-bearing walls allowed)
  • One final draw inspection is required on renovation amounts above $15,000
  • Work must begin within 30 days of closing and will typically be required to be completed within 4 months
  • All properties must be at least 1 year old and have been completed at one time