203(k) Programs

FHA 203(k) and Fannie Mae Homestyle loan programs makes it possible to purchase or refinance a property and include the cost of the repairs/improvements in your long-term financing. With typical financing, those borrowers purchasing a fixer-upper would have to apply for two loans: one for the purchase and a separate home equity loan for repairs/renovations. With a 203(k) loan or a Homestyle loan, the two loans are combined resulting in fewer closing costs and less stress.

FHA 203(k) Loans

  • Program is only available for owner-occupied properties.
  • Loan amount is based on either the purchase price plus renovation costs or the projected market value after repairs, whichever is lower.
  • Down payment is a percentage of total cost (acquisition plus repairs).
  • Projected repair/remodeling costs are held in escrow and disbursed after inspection of completed work.
  • Can be fixed-rate or adjustable-rate mortgages.
  • Repairs/renovations must start within 30 days and be completed within 6 months.
  • Can be used for 1-4 unit residential property, including condominiums
  • Can be used to convert single family dwelling into a 2-4 dwelling or vice-versa as allowed by local zoning ordinances (see eligible properties)
  • Up to six months of principal, interest, taxes and insurance may be financed to assist borrowers who would otherwise need to make double-housing payments due to uninhabitable condition of rehabilitation property

LIMITED K (formerly Streamline K) RENOVATION GUIDELINES (repair costs less than $35,000.00)

Eligible:

  • Minor kitchen remodeling-not requiring structural repairs
  • Interior/exterior painting
  • Repair/replacement/upgrade of appliances
  • Window and door replacements
  • Replace/repair roof gutters and downspouts

Ineligible:

  • Major remodeling/rehabilitation
  • New construction, including room additions
  • Repairs of structural damage
  • Landscaping
  • Any repair requiring a work schedule of more than 6 months

STANDARD K RENOVATION GUIDELINES (repair costs over $35,000.00)

Eligible:

  • Full kitchen or bathroom remodel
  • Garage
  • Structural alterations/additions
  • Major landscaping/decks/fencing
  • Permanent improvements

Ineligible:

  • New swimming pool/tennis court
  • Gazebo or bathhouse
  • Alterations/additions for commercial use

FANNIE MAE HOMESTYLE LOAN:

  • Allows for almost any type of renovation or repair, including those classified as “luxury”, if the improvement is permanently affixed to the home and adds value.
  • Renovations must be completed within 12 months. Seller concessions are permitted which means that your seller could potentially pay up to 9% of your closing costs!
  • Can be used for a primary residence, second home and multiple-unit homes
  • Minimum credit score for a primary residence is 620
  • Minimum credit score for second home or investment property is 700
  • Down payments range from as low as 5% for a single unit, primary residence to slightly more than 25% for second homes or investment properties.

Eligible:

  • Full kitchen or bathroom remodel
  • Installation and upgrading of landscaping
  • Replacement of home appliances

APPLY ONLINE >

Both Jackie and Robin were very helpful and always available to answer questions I had. Thank you for making this process as smooth as it could be.

Nicole S.

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