FHA 203(k) Loans-Which One is Right for You?
Posted by Tracy Jones on Tuesday, July 15th, 2014 at 1:03pm.
The main reason to secure an FHA 203(k) loan is when the buyers wish to repair, upgrade, or improve the home they are purchasing. FHA 203(k) loans are insured by the Federal Housing Administration (FHA), who have insured more than 40 million mortgages since 1934. The two primary versions are:
FHA 203(k) Streamline
FHA 203(k) Full
There is also a Powersaver Pilot 203(k) Mortgage which allows homeowners who include energy saving upgrades to obtain low cost mortgages. This pilot program is currently set to run through May 4, 2015.
Both the Full and Streamline versions are similar in that they are for owner occupied homes that are at least one year old, consisting of 1-4 units, with the work to be done by a licensed contractor, started within 30 days of closing and completed within 6 months. Luxury items are not permitted for either program. Both are subject to the FHA county loan limit.
Some of the differences are that the Streamline has no minimum repair amounts and the Full requires a minimum of $5,000 in repairs. The Streamline allows for up to $35,000 to be escrowed for repairs where the Full has no limit as long as the total loan is under the FHA county loan limit. The Streamline does not allow for structural repairs and the Full does.
It is imperative to choose the correct loan just as it is to choose the correct home. For more information on FHA 203(k) Renovation Loans, visit http://gulfshoresrealty.com/ or call 941-488-6644. Our Team of real estate experts and family of services will guide you in the right direction.