Sunday, October 9, 2011

Features of the FHA 203K Streamline Refinance Program

The FHA 203k Streamline program has gained popularity recently due to the number of foreclosed homes that are being purchased that are in need of repair. The FHA 203k streamline program can be utilized both as a FHA refinancing option as well as a FHA new home purchase option.

An increasing number of foreclosed homes are using the popular FHA 203k streamline program due these homes needing repair. It is available for either a new home purchase or a refinance.

The FHA 203k Streamline is a different from the standard Section 203k loan due to it only permitting repairs costing a minimum of $5,000 up to a maximum of $35,000. Thus, the total mortgage loan will permit for property acquisition with up to $35,000 of the loan proceeds to be applied toward repairs or property rehab.

Some of the more common repairs completed using the FHA 203k Streamline program include:

o Repair rain gutters and downspouts

o Repair/upgrade of existing HVAC systems

o Minor repairs of plumbing and electrical systems

o Minor repairs of existing flooring

o Minor remodeling that does not involve structural repairs

o Exterior and interior painting

o New appliances - items such as free-standing ranges, refrigerators, washers/dryers, dishwashers and microwaves but may not be greater than $2,000

o Improvements for people with disabilities/handicaps

o In addition to the FHA 203k streamline program, there is a FHA 203k standard program - which will allow more than $35,000 to be used in repairs but requires more "major" work.

The FHA 203k standard includes work such as Structural improvements including room additions, re-wiring, major landscape work, patios, decks, terraces, energy conservation improvements, steel insulated exterior doors, rehab or improvement of a detached garage.

Some highlights of the loan include:

The borrower is allowed to finance six months of payments into the loan

Up to six percent of seller contributions are allowed on purchase loans.

As you can see these are some very attractive loans for homebuyers as well as existing homeowners when a property needs a little rehab.

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