Home Buying in Salisbury>Question Details

Peggy, Home Buyer in Salisbury, NC

What is a 203K program?

Asked by Peggy, Salisbury, NC Thu Oct 6, 2011

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Hello Peggy

Thank you for your question. There are 3 main types of renovation loans:

* FHA 203K Streamline Renovation loan (limited repair)
* FHA 203K Standard Renovation loan
* Conventional Renovation loan

The 203K Streamline program allows for repairs up to $35,000 with FHA specific allowable repairs. No structural repairs permitted on the streamlined program.

The FHA 203K Standard program has no minimum repair amount but is limited to the FHA loan limit for your area like all FHA loans. However, a Standard FHA 203K loan can be used for more extensive repairs such a structural remediation. This loan does required an FHA certified inspector to evaluate and approval all repaired items prior to occupancy.

These 2 FHA Renovation programs allow for the standard 3.5% down payment minimum and follow the traditional underwriting parameters as a regular 203B FHA loan. The standard Upfront Mortgage Insurance Premiums apply (1%) as well as the monthly premiums. This loan requires the buyer to occupy the property as their primary residence.

If you need any more information please feel free to contact me.
1 vote Thank Flag Link Thu Oct 6, 2011
What are the steps to be taken by buyer's agent and the buyer?
0 votes Thank Flag Link Thu Mar 20, 2014
A 203k loan is a special loan offered for homes that need substantial renovation. It allows the borrower (if qualified of course) to take a loan out for the price of the home, plus renovation costs. There is some fine print and certain instructions have to be followed, but it is a great program that many home buyers have taken advantage of. If you are interested in learning the specifics, I can refer you to one of my lenders that handles these loans on a regular basis. Just let me know :))
0 votes Thank Flag Link Thu Oct 6, 2011
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