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203k Rehab Loan Details


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A brief overview of the FHA 203K loan. This mortgage can be used to purchase or refinance a home and make repairs or upgrades at the same time with one loan.

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203k Rehab Loan Details

  1. 1. FHA 203K STREAMLINE Introduction to the FHA 203KS Home purchase/renovation loan Copyright©2011 AHKSE.COM
  2. 2. What is the 203KS? <ul><li>It is an FHA loan product insured by HUD's FHA division </li></ul><ul><li>It allows the buyer to finance the costs of repairs or upgrades </li></ul><ul><li>Can be a fixed interest or adjustable rate loan </li></ul><ul><li>Allows up to $35,000 in rehab/upgrades </li></ul><ul><li>Can be used in conjunction with the Energy Efficient Mortgage </li></ul>Copyright©2011 AHKSE.COM
  3. 3. Maximum Loan Amount <ul><li>The maximum loan amount, including the purchase price and rehab costs, cannot exceed the FHA guidelines for the MSA in which the property exists ( link ) </li></ul><ul><li>The $35,000 rehab/upgrade must include a 10% contingency fee making the maximum rehab estimate stop at $31,500 </li></ul><ul><li>The maximum loan amount includes the rehab costs </li></ul>Copyright©2011 AHKSE.COM
  4. 4. Types of Repairs <ul><li>Almost anything structural except adding space, foundation work and anything not a part of the house </li></ul><ul><li>Built in appliances, HVAC, plumbing, roof, windows, kitchens, bathrooms, carpet, gutters and downspouts, water damage, mold remediation – all are included </li></ul>Copyright©2011 AHKSE.COM
  5. 5. Who can do the work? <ul><li>For this program the work must be completed by an approved contractor </li></ul><ul><li>Contractor must provide references, licenses and insurance </li></ul><ul><li>Contractor must sign a draw agreement </li></ul><ul><li>Contractor is responsible for all permits and municipal inspections </li></ul>Copyright©2011 AHKSE.COM
  6. 6. How soon must work complete? <ul><li>If the work is going to interfere with occupancy it must be completed within 30 days </li></ul><ul><li>The program allows for work to continue for 120 days but it is recommended all work be completed within 30 days </li></ul>Copyright©2011 AHKSE.COM
  7. 7. What if costs run over? <ul><li>A 10% contingency is required and is a part of the loan </li></ul><ul><li>If costs run over the 10% contingency the debt must be cleared before the loan can finalize – the contractor must free you and the lender from debt before it can be released </li></ul><ul><li>You will be responsible for all overruns </li></ul>Copyright©2011 AHKSE.COM
  8. 8. How long does approval take? <ul><li>The normal part of the loan can be approved in just a few days like any other FHA loan </li></ul><ul><li>Once the contractor has submitted the costs and we verify they have been approved by our underwriters the loan will be underwritten </li></ul><ul><li>All normal conditions for FHA loan approval apply </li></ul>Copyright©2011 AHKSE.COM
  9. 9. Are there additional costs? <ul><li>There are a couple of fees associated with the 203ks loan which are not associated with a normal FHA loan </li></ul><ul><li>There are 2 appraisals – the initial appraisal and the final inspection </li></ul><ul><li>There is an additional underwriting fee to approve the rehab part of the loan – it's relatively small </li></ul>Copyright©2011 AHKSE.COM
  10. 10. Other important notes <ul><li>May be a purchase or refinance 1-4 family residence </li></ul><ul><li>Can be used with a $100 down HUD REO property </li></ul><ul><li>Cash OUT refinances are NOT allowed** </li></ul><ul><li>Borrower & credit eligibility same as FHA programs </li></ul>Copyright©2011 AHKSE.COM
  11. 11. How do I get started? <ul><li>The first step is to get pre-approved. If you have fair credit, average income and no negatives in your credit history pre-approval is quick and painless </li></ul><ul><li>Go to for a pre-approval form and you'll know within a couple of normal business hours </li></ul>Copyright©2011 AHKSE.COM
  12. 12. Georgia Licensing <ul><li>See website for additional licensing info </li></ul><ul><li>Americahomekey, Inc., A Direct Mortgage Lender. 2300 Windy Ridge Parkway, Suite 840n, Atlanta, Ga 30339. Georgia Residential Mortgage Licensee Number 23191. NMLS ID 2156. Equal Housing Lender. Subject To Errors, Omissions And Changes. </li></ul>Copyright©2011 AHKSE.COM