FHA 203K Streamline Renovation loans in KY
general information on the 203k
- Intended to assist homeowners with basic repairs and modernize home.
- Can finance up to $35,000 including reserves, etc.
- Repairs must begin within 30 days of close & be completed within 6 months.
- Property must be existing structure and completed at least l year.
- Owner-occupied; one to four unit properties permitted.
- Log homes, manufactured homes, or homes less than 1 year old are permitted.
- No improvements to detached structures or luxury items.
- The property must appraise to cover price plus repair and rehab cost.
- May finance 96.5% of price plus 100% of repairs and rehab, up to 110% of "As Completed" Value.
- FHA does not require a contingency reserve. At the lender's discretion, reserves of the total renovation costs can be mandated to allow for cost overruns. The reserves are part of your total $35,000.
- Finance inspections, 203k title updates, and required working permits are allowed in this cost.
Eligible Work Items for fha 203k
- Repair/Replacement of roofs, gutters and downspouts
- Repair/ Replacement of HVAC, plumbing and/or electrical
- Repair/Replacement of existing flooring
- Minor remodeling not involving structural work
- Exterior and interior painting
- Weatherization: storm windows & doors, insulation, etc.
- Appliances not exceeding $2,000 total cost
- Access improvements for persons with disabilities
- Repair/Replacement/Addition of decks, patios, porches
- Basement finishing/remolding not structural in nature
- Basement waterproofing
- Replacement of windows, doors or exterior siding
Ineligible Work items for fha 203k Streamline
- Any work involving relocation of a load-bearing wall.
- Any work requiring detailed or architectural drawings.
- New construction (including room additions).
- Landscaping or similar site amenity improvements.
fha 203k Contractors
- Try to use a contractor that will handle all the work and invoices. A General contractor is not required, but makes the process easier.
- Borrower selects contractor not the lender.
- Contractor must provide estimate for work to be done.
- Contractor must provide licensed and carry E&O insurance.
FHA 203k loan disbursements
- Two-party checks to Borrower(s) AND each Contractor.
- The first payment of renovation cost is at closing.
- The balance of costs will be released upon completion of all work, inspection by appraiser and title updates.
- Inspection is coordinated between Investor and Borrower.
- Any excess funds will be applied to principal balance of borrower’s loan.