FHA 203(K)
What is an FHA 203(K) Loan?
If you are searching for a home to buy, and you cannot find the perfect home within your budget, that has the exact carpet, tile and finishes that you want, then the FHA 203(K) Loan may be the solution you need.
Known by many similar names as the FHA 203(K) Rehab Loan, 203(k) Streamlined or 203(K) Consultant K loans, the FHA 203(K) Loan is basically the technical term for the Section 203(K) Rehab Mortgage Insurance, which is a type of government insured mortgage program that allows homebuyers and owners the ability to finance renovation costs through a single home loan during a purchase or refinance.
The Different Types Of 203(K) Loans:
The reason for the different names is that there are actually several types of FHA 203(K) loans. There are loan programs for lighter cosmetic upgrades, that do not require use of a consultant, architect, or engineer all the way to more involved repairs that involve structural changes such as room additions, exterior grading and landscaping.
What Is The Advantage Of FHA 203(K) Loans?
The 203(K) rehabilitation mortgage program was created to fill an important need in expanding homeownership opportunities while revitalizing communities and neighborhoods.
For most traditional mortgage loans, homebuyers purchasing properties in need of minor or major repair would be responsible for paying for those upgrades out-of-pocket. And if any of those improvements were a condition of the financing as highlighted in a home inspection, then those repairs would have to be made prior to the loan closing.
The FHA 203(K) Loan fills that gap and helps a buyer who will be the primary resident to upgrade a property without necessarily having to pay for repairs separately after acquiring a mortgage loan.
