The government came up with the FHA 203k Loan idea in the late 1970's. Then a few years ago lawmakers decided to change things up a bit and introduce something called the "Streamline 203k." To get a better idea in this program, we need to dive into what the 203k loan is all about.
HUD defines the 203k loan as its "primary program for the rehabilitation and repair of single family properties." This means the loan helps pay for improvements, renovations, repairs and rehabilitation. This covers that fixer-upper a lot of potential home buyers are finding in this era of short sales, foreclosures and bank-owned homes on the market. But not every home needs a ton of repairs. The Full 203k loan covers things like pouring a new foundation, or jacking up the home to replace a sill plate. These are major repairs. However, sometimes a buyer simply wants to replace carpet or repaint the home. Maybe the house has some mold that needs to be removed. This is where the Streamline comes in to play. The Streamline covers repairs up to $35,000.
Both loans take time and patience, but the horror stories of taking months to close should not happen. This happens when someone in the process may not be educated on the process. A 203k expert should know the ins and outs of the government requirements, and should have a network of licensed and trusted contractors to get the work done. Since HUD does not make direct loans to help people buy homes, buyers must find a lender who specializes in government-backed programs like the 203k.
The 203k loan, whether it's the Full or the Streamline, can help turn renters into first time home buyers. This program can also turn blighted neighborhoods into desirable places to live again. Take time to find a 203k specialist in your area and ask about this great option.
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