Updated January 2018
FHA 203k Loans – An Introduction
Are you thinking of buying a property that needs work and then transforming it into your dream home? Perhaps you already own a home you’d like to improve?
A qualified buyer can purchase a home in poor condition – and borrow the money to bring that home up to FHA standards – all in one loan called FHA 203k. It also allows a person who already owns a home (as their primary residence) to refinance and remodel their home.
FHA 203k loan programs and other renovation loans, such as the Fannie Mae Homestyle Standard loans, can help make the homeownership dreams a reality for new home buyers.
Whichever your scenario, you’ve come to the right place to get information about the FHA 203k loan and other methods of financing your renovation project.
You Aren’t Alone, Many are Doing the Same Thing
Rest assured that you are not alone! Renovation is becoming a passion for folks all over the county. Smart buyers everywhere are finding deals on distressed homes and then using the FHA 203k loan to turn them into their dream homes.
Likewise, many homeowners are realizing that to raise the property’s value that they’ve lost they have to keep the home and remodel it. This can be a more beneficial than selling the home for less than they feel it’s worth.
What things Can You Do with 203k?
Let’s start with what the potential buyer can do with this wonderful opportunity.
If you’re one of those buyers who sees upside potential in a “beat up” home and doesn’t mind putting a little extra effort into that home to “make it your own”, you may be able to take advantage of some financial benefits:
- You may be able to buy the home for less than it’s true value
- By getting a ‘bargain price’ you may be able to buy a home in a better or more desirable neighborhood or school system than you otherwise may be able to afford
- You may be able to buy a larger home or a newer home than you otherwise could have afforded
- The improvements you make could increase the fair market value of your home
- You can make this home exactly how you want it to be from features to colors; you can remodel a basement or add a room – or virtually anything that makes sense financially
- You can take care of necessary needs such as handicapped accessibility or improved energy efficiencies
Common topics about FHA 203k Loan
1. Getting Pre-Qualified With an FHA 203k Lender
Getting pre-qualified for the FHA 203k loan program is a good idea so that you know ahead of time what your budget constraints will be. You will be able to know exactly how much you can afford, what the payments will be, and which common pitfalls to avoid in the underwriting process.
You may be interested in: getting pre-qualified with an FHA 203k lender
2. Finding The Right Property For a 203k Renovation
Once you have been pre-qualified, the next step is to find a property. This can be the fun part if you know where to find good deals.
But if you don’t know where to begin to look for a good deal, here is a start: bank-owned properties. Most Realtors know how to help you find a property that will be a good fit for the FHA 203k loan program and can show you how to get a good deal on one.
You may be interested in: finding the right property for FHA 203k loan
3. Role of Inspectors, Contractors, Appraisers, and Consultants
What is the role of contractors, appraisers, HUD consultants and inspectors in the FHA 203k loan process? Each of these people plays a vital part and here is more information about what you want to know when dealing with each one: The role of Inspectors, Contractors, Appraisers, and Consultants
4. Financing a Fixer Upper and Selling For Profit with FHA 203k Loan
With real estate prices down, it is possible to find a great deal on a property that needs some work, get a FHA 203k loan to finance it, fix it up and sell it for a profit.
You may be interested in: finding a fixer upper, fixing it and selling for a profit
5. Using Grant Programs in Conjunction With 203k Loan Financing
Is it possible to use a grant program along with FHA 203k loan? Find out more about what is and isn’t possible here: Using grant programs in conjunction with FHA 203k loan financing
6. Can You Do Your Own Work With FHA 203k Loan?
Is it possible to do the work yourself when getting FHA 203k loan? Learn more about what is required in the event that you want to perform the work yourself when getting FHA 203k loan.
You may be interested in: doing the renovation work yourself when getting a 203k
7. The FHA 203k Streamline Program
Learn more about the FHA 203k Streamline program and how it can help with minor repairs and improvements: The FHA 203k for minor repair and improvements.
8. Advantages of the FHA 203k Loan Program
See some of the advantages of the FHA 203k loan program and see why many people like the 203k: The advantages of the FHA 203k loan program.
Common FHA 203k FAQs
Even more FHA 203k common questions. See answers to many of the most popular FHA 203k questions: Click here.
FHA 203k Lenders and Quotes
Finding a lender who can help you with FHA 203k mortgage is relatively easy. Use our simple matching inquiry form, submit your information and we will go to work trying to match you up with a great FHA 203k lender.Ask our lenders about your mortgage options today.