Tuesday, March 20, 2012

Consider Repairing Your Home With the Help of FHA 203k Streamline Rehab Loans

Are you considering buying a home that needs repairs or rehabilitation? Are you living in a home that needs repairs or updates, but can't find a loan to pay for those needed repairs? HUD has a program for which you may qualify. The FHA Streamline 203k Rehab Loan is designed just for people who would like to purchase a home that needs repairs or would like to refinance their home and make needed repairs.
Typically, when you purchase a home that needs repairs, you have to set up a complicated series of loans. First, you have to take out a loan for the home's current value, then find a lender to borrow the money for the repairs. Finally, after the repairs are finished, you have to refinance the home at its new value and pay off the first mortgage and the repair loan. The FHA 203k Rehab loan is designed to streamline that process. With a FHA 203k loan, you take out a mortgage on your home and specify the repairs needed and their expected cost. The amount for the repairs is put into an escrow account on which you can draw as the work is completed.  FHA 203k loans are available to first time home buyers and others who may not qualify for traditional commercial loan products.
How can I use the FHA 203k Loan program?
FHA 203k loans can be used to secure a mortgage in three ways:
- You can use an FHA 203k loan to buy a dwelling and the land on which it sits and do repair and rehab work in place
- You can use an FHA 203k loan to buy a building on another site and move it to a new foundation on the mortgaged property and repair it
- You can use an FHA 203k loan to refinance an existing mortgage and repair the mortgaged dwelling
What properties are eligible for Arizona FHA 203k financing?
FHA 203k loans can be used to purchase or refinance one to four unit family dwellings, including condominium units under certain circumstances.
What repairs are allowed under an FHA 203k loan?
A homeowner can use a 203k loan to make needed repairs that become a permanent part of the existing home. The cost of the repairs must be at least $5,000 and less than $35,000, except under very specific circumstances. If a home requires updates or repairs to meet energy efficiency or safety standards, those must be included in the loan amount and must be completed before other repairs. If there are no required repairs, then FHA 203k financing can be used for painting, room additions, decks and even to upgrade appliances in a home. Among the repairs that qualify under the $5,000 minimum requirement are:
- Reconstruction and structural repairs like chimney repairs, repairs of termite damage, roof repairs, addition of skylights
- Modernization or projects that improve function like adding or updating a bathroom, remodeling a kitchen or adding built-in appliances to a kitchen
- Eliminating health and safety hazards, like lead paint or asbestos abatement
- Changes for aesthetic appeal like new siding or adding a second story to the home
- Plumbing replacement or reconditioning, including the installation of new plumbing fixtures like interior whirlpool tubs
- Energy efficiency improvements like the addition of solar panels or caulking and weather stripping, or installation of double hung windows, etc

Article Source: http://EzineArticles.com/1983398