FHA’s 203K loan program is design to finance the purchase and renovation of a home. FHA’s Streamlined 203(k) program allows home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.
To be eligible, the property must be a one- to four-family house that has been completed for at least one year. The number of units on the site must be acceptable according to the plans of local zoning requirements. All newly construct units must be attach to the existing house. Cooperative units are not eligible. An existing house (or modular unit) on another site can be moved onto the mortgaged property. However, release of loan proceeds for the existing home on the non-mortgaged property is not allowed until the new foundation has been properly inspected and the house has been properly placed and secured to the new foundation. The Department also permits Section 203(k) mortgages to be used for individual units in condominium projects that have been approved by FHA.
What improvements are eligible under 203K loan?
- Repair/Replacement of roofs, gutters and downspouts
- Repair/Replacement/upgrade of existing HVAC systems
- Repair/Replacement/upgrade of plumbing and electrical systems
- Repair/Replacement of flooring
- Minor remodeling, such as kitchens, which does not involve structural repairs
- Painting, both exterior and interior
- Weatherization, including storm windows and doors, insulation, weather stripping, etc.
- Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
- Accessibility improvements for persons with disabilities
- Lead-based paint stabilization or abatement of lead-based paint hazards
- Repair/replace/add exterior decks, patios, porches
- Basement finishing and remodeling, which does not involve structural repairs
- Basement waterproofing
- Window and door replacements and exterior wall re-siding
- Septic system and/or well repair or replacement