So you want to buy a home but the only homes you can afford are older and/or need repairs. Maybe it’s a foreclosure or short sale that would be a good deal if only you had the extra money to make repairs; put in new appliances, a new furnace or new windows, for example. The FHA 203K Streamline loan allows a borrower to tack on up to $35,000 (provided they qualify) in order to make improvements to the home.
Currently the Federal Housing Authority (FHA) is writing fully 35% of all new mortgage loans. But the 230K Streamline is very under utilized. If a home needs some kitchen or bath updating, a new furnace, A/C, etc, the money for these improvements can become a part of the mortgage and the improvements can be made without a buyer going into credit card debt or using personal savings. The rate for the 203K Streamline is slightly higher than the conventional FHA but much lower than a credit card interest rate and is spread out over the 30 year life of the loan. Here are some of the improvements the loan can be used for:
- Roofs, gutters and downspouts
- HVAC systems (heating, venting and air conditioning)*
- Plumbing and electrical
- Minor kitchen and bath remodels
- Flooring: carpet, tile, wood, etc.
- Interior and exterior painting
- New windows and doors*
- Weather stripping & insulation
- Improvements for persons with disabilities
- Energy efficient improvements*
- Stabilizing or removing lead-based paint
- Decks, patios, porches
- Basement completion and waterproofing
- Septic or well systems
- Purchase of new kitchen appliances or washer / dryer*
Certain improvements can get you a federal tax break. If you make improvements to increase the energy efficiency in your home that meets Dept. of Energy’s Energy Star standards, you can deduct 30% of the cost up to $1500. The astericked items are some that qualify.
When you’re ready to buy or sell a home, call me, your going green real estate advisor.
Gayle Fleming, Keller William Realty
Follow me on Twitter@ecogayle