Sunday, August 2, 2009 - Article by: Jacqueline Clarke - Enterprise Mortgage Group -
203K Rehab Loan is one of FHA's best kept secrets. This product was dusted off to help First Time Homebuyers purchase homes that may need some TLC. This loan product has two versions - The 203k-Standard and the 203K Streamline. The buyer only pays one monthly mortgage payment because the costs are rolled into the first mortgage.
The 203K Standard can be used for major renovations and extensive repairs. You must use a General Contractor to perform these repairs and they must be completed within 6 months of closing. There is no limit to the repair costs under the 203K Standard but the loan is based on the future value of the property after the repairs are completed.
Repairs under the 203K Streamline ("Mini 203K) cannot exceed $35,000 and must be completed within 90 days of the closing. There is no min. loan amount so the buyers can purchase appliances, do minor renovations or replace big ticket items, like an a/c or roof. A General Contractor is not required to perform these repairs but whoever is doing the work must be licensed and insured.
The down payment is adjusted according to the cost of repairs, with a minimum of 3.5%.
Some SHIP (Down Payment Assistance) programs allow first time homebuyers to purchase propertieswith the 203K rehab using their government gift funds. I have closed several loans over the last year with Orange County Housing. And have closed several without dpa.
The 203K Rehab Loan is ideal for the First Time Homebuyers and buyers who have thin pockets but want to take advantage of historically low interest rates and even lower sale prices.
For more information on obtaining a 203K rehab loan, please contact me directly at 407-739-3853 or via email: firstname.lastname@example.org.
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