Use the FHA 203K Loan to Rehab Your New Older Home

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

 www.goinggreenhomesva.com              gayle@goinggreenhomesva.com        703-625-1358   

Follow me on Twitter@ecogayle

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One response to “Use the FHA 203K Loan to Rehab Your New Older Home

  1. 203k loan is designed for home repairs.
    From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
    This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.

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