What You Need To Know About The FHA 203(k) Rehab Loan
This is a great loan especially for those buying in Fort Lauderdale and South Florida since so many homes are foreclosures and short sales that are in need of work. The work is needed to be done in order to get financing and also for improvements the buyer wants to make.
So who can qualify for this and how does it work? It has to be your primary residence, you can’t have any other FHA mortgages, have the credit, income, and assets, and be within the counties loan limits.
It is an FHA mortgage which requires 3.5% that allows for repairs and improvements to be made to the property. It is best to try to keep the total costs at $35,000 or less because you qualify for the 203K Streamline Rehab which is an easier process. If you go over that amount it’s not a big deal.
Here is a description from HUD’s (FHA) website on how it is different – “Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made……..
There is a lot to know on this product so make sure to consult a Mortgage Professional like myself that is an expert on it. You can also visit HUD’s website online to read up on it yourself.