Garage Guys like to play... We like the challenge of a rehab. This is a great option. Find a cool place and make it cooler. Turn the basement into a cool car themed pub. Add a home theater to play Bullit and Gone in 60 Seconds.
You can't add a garage under the rules... but you certainly can do a lot of other things. Imagination is the limit. OK, the FHA rules are the limit, but they allow some creativity.
So, on to Ken's post...
"Oh I don't want to mess with all that trouble", the agent said to me during a phone conversation. She meant she did not want to mess with selling a home that needed a new roof, some plumbing repair, new carpet and new appliances which I could finance into the loan amount.
I asked, "why not? What trouble?"
It seems she had a few misunderstandings about how this powerful purchase loan works. The truth is it doesn't involve any extra work for her than a regular FHA loan. What it does it take an unsellable home and turn it into a sale. Conventional loans do not allow for some of these types of repairs on an "as is" home sale. Even there it increases the sale amount by the mere virtue of dealing with a homeowner financing the property instead of an investor paying cash for the property.
The FHA 203k Streamline purchase loan is perfect for the large majority of homes in the US. Any home that qualifies for a standard FHA home loan, the 203b, also qualifies for the FHA 203k if it needs less than $35,000 in non-structural upgrades or repairs. So what CAN you do with an FHA 203k loan?
- Repair or replacement of roofs, gutters and downspouts
- Upgrade of plumbing and electrical systems
- New flooring or floor covering
- Exterior decks, patios and porches
- Minor remodeling (no structural such as room additions)
- Paint and wall covering
- Weatherization including storm windows, storm doors, insulation and weather stripping
- Purchase and installation of new appliances
- Disability access improvements interior and exterior
- Basement finishing and remodeling
- Basement and crawl space moisture control and waterproofing
- Window and door replacement
- Exterior residing such as replacing old, defective siding
- Septic system or well repair or replacement
One caveat which we don't understand is the FHA 203k Streamline does not allow for completion of a home which was started in construction but not completed. This is one they really need to take a look at because I get at least one call every month or so with this exact question which tells me others get it, too!Repairs cannot take any longer than 6 months and there are only 2 draws available regardless of how much the contractor(s) beg. Your contractor will need to be able to fund the job for up to 60 days out of pocket while they wait on the draw from the bank.Most lenders require the contractor to be licensed in the state where the property is and do not allow the home owner/buyer to do the work their self. You *may* be able to find a lender who will allow the work to be owner performed *if* the owner can prove they are a professional in that type of work. My company does not allow this.Plan on a little extra time to close these loans because of the necessary underwriting. There are a few documents extra which are needed which I will not disclose here because while I enjoy helping the general public I have to be careful about educating my competitor's and their inexperienced loan officers.When you need an FHA 203k (or any other mortgage) call me. My team is the best of the best and if it can be done we'll get it done or let you know as soon as we know differently.Ken Cook - Georgia - FHA, USDA, VA and Conventional Home Loans (678) 439-8683
Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey.
I'd love to hear from you...
I've used this program in the past and really helped a lot of people out with it. Great job for the post! Thanks for spreading the good news.
Donna Stott
DStott@qtscoaching.com
Donna - Ken deserves the credit. And your email address in the comment is kind of spammy. If people are interested in hiring you, your name links back to your profile.
Lane - if a buyer can find a good contractor who will help them find the best service providers and services for all the repairs/updates they want - they will love having a 203K Streamline Loan. Let me know if you need a local company - I know of 2 reliable and honest contractors who do 203K Streamline work!
Patty - You do? ;^ )