Program: HUD Streamlined 203(K) Limited Repair
Detail Verified 9/3/2020 - Last Updated 4/17/2019
FHA’s Limited 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser. Homeowners can make property repairs, improvements, or prepare their home for sale. Homebuyers can make their new home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet.
This program is available statewide.
Who is Eligible for this Program?
Must have a valid social security number, lawful residency, be of legal age to sign a mortgage. Verifiable income assets, credit history and reasonable debt ratio. No minimum credit score requirement.
No income limits for qualifying. Verifiable sufficient income required. Income limits may apply with some down payment assistance programs.
Assistance amount is up to $35,000.
The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k) insured loans can finance the rehabilitation of the residential portion of a property that also has non-residential uses; they can also cover the conversion of a property of any size to a one- to four- unit structure.
Is this program for first time buyers only?: Yes
Property Eligibility Requirements
Loan limits determined by State and by County - Federal Housing Administration (FHA) guidelines apply.
Allowable property types: SFR, 1-4units, condos
All improvements must comply with Housing and Urban Development's (HUD) Minimum Property Standards. Work must begin within 30 days of execution of the agreement.
Benefit: Allows homeowners to make minor repairs without exhausting personal savings. The revised maximum repair/rehabilitation amount recognizes the cost of making older homes more energy efficient.
Loan Term: 2 year ARM to 30 years
Homebuyer Counseling / Education Required: No
Owner Occupancy Required: Yes
Other Program Comments: If cost estimates are completed within 2 weeks of signing a sales contract, the loan should close within 60-90 days, asuming there are no title problems and the borrower qualifies.There are no increases to cost available during the rehab phase.