Saturday, May 24, 2014

What Minimum Upgrades are REQUIRED on a 203k?

This will show you the minimum requirements for an FHA 203k project

30A-110V main panel no good for the FHA 203kElectrical 

The electrical system must be a minimum of 100 and with breakers no fuses are allowed. So if you're dealing with an older home that has a few system is a penny fuses or cartridge fuses they must be upgraded to a breaker type system with 100 A minimum 220 V.

Insulation 
Attic MUST be insulated
Attic MUST be insulated Attic insulation must be installed if there is none present. Many homes were upgraded some years back when R19 was the norm. It's my understanding that these do not have to be upgraded though we always recommend it as insulation is an easy way to recover your investment.

Weatherization 

Weatherization includes weather stripping, caulking at the window and door frames, and in general tightening up the home to minimize air and water intrusion.

Caulking 

Caulking goes right along with weatherization like a hand in glove.

Minimum property standards (MPS) 

The FHA minimum property standards primarily consist of or deal with Health and safety issues. That is, anything that is unsafe should be fixed anything that's a health or safety issue should be remedied. In general, this means badly soiled carpet should be replaced, broken glass or Windows need to be repaired. Boards with nails sticking out of them need to be removed from the site.

There is another aspect of the minimum property standards that deals with whether or not the home appears that it will last as long as the mortgage that were putting in place. So if the front porch is falling apart now, it likely won't last another 30 years and should be repaired. This would include termite issues, dry rot, and broken support members. The caveat is that the home under normal owner maintenance should have the appearance of lasting as long as the mortgage.

There isn't the day that goes by that someone doesn't tell me they just want to do the bare minimum repairs required by HUD/FHA. Then they'll fix the house up after they moved in at their own pace and at their own expense. In many cases the saddens me a bit because I think it's so important to do as many of these things as possible before they move in so they can enjoy their home.

We can do the minimum that is the problem, but is it what they really want. You do not want to be a slave to your house. With the interest rates as low as they are today. It makes no sense not to get most of the work done right now. Then sit back and enjoy your home.

We are seeing lots of failed septic systems which is repairable with the Full 203k. Need a lender try Don Jr at Prospect Mortgage

-Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation".