Home Buying in Michigan>Question Details

Felicia, Home Buyer in Canton, MI

FHA 203K

Asked by Felicia, Canton, MI Sat Dec 13, 2008

Does the 203K loan limit how much can be spent on appliances? I heard there was also a loan available for purchasing energy efficient appliances. Does this program exist?

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Felicia,
There is not a limit on how much you can spend, however if total repairs/add-ons exceed $30,000 then you will have to do a full-blown 203k as opposed to the "streamline" version. A full blown 203k will have additional fees associated with it, and you'll be required to work with a repair consultant as well. So if you can keep everything under $30,000 it will be a much easier process. And also remember the home must still appraise so don't go too crazy :)
0 votes Thank Flag Link Sun Dec 14, 2008
The minimum requirement for any 203(K) rehab is $5000. If a feasability study has detemined that the project will cost a minimum of $5000, then additional costs can be added. FHA handbook 4240.4 section 1.7 states that when basic improvements are involved, the following costs can be included in addition to the minimum $5,000 requirement for the existing structure:

- Construction or rehabilitation of a detached garage or an
attached unit(s) to the existing dwelling (if allowed by the
local zoning ordinances).
- New cooking ranges, refrigerators and other appurtenances

It does not give a limit as to how much you can spend on appliances, they can not be used appliances and they have to meet the most modern energy usage guidelines.

It is my opinion that you do not need another program for buying appliances, you can do it all under the 203(K) loan.


Ed Mendelson
203(K) Consultant
ID #A0890
0 votes Thank Flag Link Thu Dec 30, 2010
GREAT QUESTIONs however need to be directed to your mortgage broker who will provide you guidelines for that particular type of loan. Check with your state if any type of rebate to purchase energy efficient appliances. Example Texas does

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Thu Dec 30, 2010
You can do the EEM mortgage in conjunction with the 203k. You will have to provide the documentation that shows the savings from using EEM appliances which shouldn't be too hard.
There is no real benefit here except that you are allowed slightly higher debt ratios. If you are thinking you get a lower rate and cost that is out of the question as that is not the purpose.
0 votes Thank Flag Link Thu Dec 30, 2010
The technical answer is no, but as always (in this market) the appliance expense needs to be reasonable. You won't get a Viking kitchen approved in an $80,000 purchase.

The EEM (Energy Efficient Mortgage) can be used individually or in conjunction with a FHA 203K. You'll need a HERS (Home Energy Rating) report that usually kills what you'll save via the EEM. However, if there scenarios where the EEM works well. Avoid rookies with these loans, use someone with experience.
Web Reference: http://www.203kloan.net
0 votes Thank Flag Link Mon Jan 18, 2010
Feleica,

If you need help with guidelines and questions about the 203k loan please go to http://www.203kloanillinois.com. There is a lot of good information there.

David P Cruickshank
Ardain Mortgage Corp.
847-354-5455
http://www.davidpcruickshank.com
0 votes Thank Flag Link Fri Jan 15, 2010
http://www.michigan.gov/mshda

Look in the left menu. You may have to meet income qualifications for this type loan
Web Reference: http://mi-living.com
0 votes Thank Flag Link Sun Dec 14, 2008
Check out my blog on the Energy Effecient loans:

http://activerain.com/blogsview/826169/Energy-Efficent-Lendi…
0 votes Thank Flag Link Sun Dec 14, 2008
I am not a loan officer, but have worked with the 203K program as a realtor. Give me a call and I can give you the name and number of a great agent who is familiar with this program. I believe there is no limit on the appliance cost.
Mary Novak
Cell 517 861 7064
0 votes Thank Flag Link Sun Dec 14, 2008
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