Jul
29
With much buzz about foreclosures, bank owned homes, and short sales, FHA Rehab loans have become more commonplace today. However, it’s important to know this is not the only situations a rehab loan maybe used. Today, I’ll highlight some of the basics.
As a loan officer, I get a ton of questions from both borrowers and Realtors regarding rehab loans. Now, I won’t get into all that goes into a rehab loan but just a brief overview of this mortgage product so we are all armed with a little more information.
A traditional FHA loan that most of us are familiar with is called a 203B but an FHA Rehab Loan is called a 203K and its strictly for renovation lending. There are two types of 203k loans: STREAMLINED 203K LOAN and a FULL 203K LOAN. The main difference is the level of renovation needed and costs involved. A streamline 203k is meant for renovations up to $35,000 and a full 203k is for renovations greater than $35,000. Once you have exceeded the $35,000 threshold you will then have to work with an FHA consultant who will oversee the entire project. If you remain under the $35,000 threshold it will not necessitate an FHA consultant and can employ self directed licensed contractors.
Eligible properties for these loans include attached and detached single families, PUD’s, two to four unit properties and condos in FHA approved projects. The loan is a 30 year fixed and it must be for a primary residence. There is also a minimum $5,000 requirement for the eligible improvements. Minor repairs or simply cosmetic repairs are typically unacceptable.
Some of the projects a rehab loan is eligible include are:
• Structural alterations/reconstruction of areas such as garages, chimney’s attics, basements or areas with termite/insect damage
• Changes for improved function and modernization including remodeling of bathrooms and kitchens
• Changes of aesthetic appeal/remove obsolescence such as new siding or a new porch or second story addition.
• Replacement or reconditioning of plumbing, heating , a/c or electrical fixtures
• Installation of well or septic system
These are just a few of the eligible projects for a 203k loan. These loans typically take longer to close as it involves a lot more paperwork and procedures especially in the case of a full 203K. However, they serve as a usual tool especially in a market inundated with foreclosure homes in need of repair.
If you have any questions regarding 203k Rehab Loans please call me Jennifer Rahner at
S.I. Mortgage at 718-689-2541.

. One thing is for sure the area features some high end homes. As a matter of fact, one and two family detached homes sold in the area year to date have averaged $516,053. Some homes can even near million dollar territory. From a housing stock perspective, the neighbored shares resemblances to its cross harbor neighbor of Bay Ridge, Brooklyn.
FHA loans will now have a minimum credit score of 500. FHA Loans were once devoid of any minimum credit score but as the guidelines tighten for FHA loans borrowers with very low credit will be unable to obtain FHA financing. Most lenders already had minimum credit score standards in place for FHA (typically 620) financing so the impact on the industry will be minimal.
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defines the knack these homeowners had in creating modern home features, while giving the experience of being in a room rivaling that of a Classic Victorian Mansion. You may beg to question, how such a modern features like a Jacuzzi tub can be made to look traditional? I couldn’t give you a photo good enough to capture the experience; my best suggestion would be to take a look for yourself.
space has what can easily be two bedrooms; and this is on top of three bedrooms on the homes second level. Currently one of the rooms is used as a large office the other a den. Not to mention sky lights, another half bathroom and an amazing third story walkout porch that gives you a panorama of lower New York Harbor. And these features are just the topping of this awe inspiring home.
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