411homerepair.com

Latest Articles

When to Consider Hiring a Heating and Cooling Company

The weather is not something you can control, and whenever you go outside, you are forced to layer up and adapt to the temperature. In your own...

on Mar 1, 2021

Important Roofing Regulations to Consider

Having a home you can truly enjoy that is not only liveable, but safe, sturdy, and a delight to inhabit requires more than picking out the right...

on Feb 24, 2021

What to Consider When Choosing a Furnace Service Contractor

HVAC systems are among the costliest systems that you can install in your house. Therefore, you would probably want to do all possible things for...

on Feb 19, 2021

Choosing a Reliable Furnace System for Your Home

Either way, it would be great if you can invest in something you will benefit from for a pretty long time. If that is the case, you would know that...

on Feb 19, 2021

Lawyers vs. Real Estate Agents: Who to Hire When Buying a House

Because buying a house is already so expensive, most buyers would want to spend as little extra money as possible. Consequently, some may balk at...

on Feb 18, 2021

What to Do If You Want to Rehab Your Home but Are Low on Cash

by James Cartwright on Aug 7, 2015

Have you been thinking about a new bathroom? Considering remodeling the kitchen? Perhaps you have thought about how a new addition would increase your living space. If you are short on that commodity, there is a government backed program designed to make getting home rehab loans easier, and you will likely want to take advantage of it.

What is a Home Rehab Loan?

Home rehab loans enable homebuyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.  Backed by the U.S. Department of Housing and Urban Development (HUD), the FHA 203K loan fills a unique and important need for homebuyers – instead of homeowners having to apply for a mortgage and a separate loan for home improvements, both are conveniently wrapped up into one single loan.

What is a 203k Home Rehab Loan?

In the past, rehab loans came from either a second mortgage, equity loan, or homeowners using expensive credit card debt to finance projects. These sources were complicated and costly. FHA rehab 203k loans are rehab loans for homeowners that are issued by private lenders but are insured by the government. This makes the lenders more comfortable in issuing the loans, oftentimes at terrific rates. It also gives homeowners another valuable option in getting the money they need for improvements they want to make.

Why an FHA 203k Rehab Loan is Especially Valuable for DIYers

A rehab loan is based on the value of a home after the project is completed. That means if a property is worth $200,000 and worth $250,000 after the renovations, the loan adds $50,000 worth of value to the home. Someone skilled at do-it-yourself projects may be able to accomplish this with $25,000 worth of materials and by providing their own “sweat equity”. This can result is several favorable situations.

  • You could use the additional value to make more improvements.
  • You can lessen the amount of money needed for your projects.
  • You can finance the full amount and use the funds elsewhere.

Plus, when you use your skills or those of family and friends, you increase the likelihood you will not have to use any out of pocket money to complete your project.

Guidelines You Should Know About

There are limitations/guidelines to a 203k rehab loan but they are far from restrictive. Projects must be at least $5,000 and homes must be at least one year old. Projects that can be completed under the program are also varied. They include structural alterations and reconstruction, modernizations and improvements to the home’s functionality, and eliminating health and safety issues. They also include alterations that improve a home’s appearance, update plumbing, roofing, flooring and major landscaping. Energy conservation improvements and accessibility options for a disabled person would also be covered under the program. So, as you can see, the restrictions are far from restrictive.

How Do You Get a 203k Loan?

As we mentioned earlier, 203k loans are issued by private lenders. These private lenders must be FHA approved and must follow FHA guidelines, including knowledge of the FHA limits for your area. You can find knowledgeable and efficient 203k consultants with Prospect Mortgage at MyProspectMortgage.com and they can be of terrific value when applying for an FHA 203(k) rehab loan. They can steer you through the process and even offer other financing products you may be able to take advantage of.

If you are considering a major home remodeling project but are short on cash, especially if you have some DIY skills, 203(k) consultants are a valuable resource. Don’t be discouraged by talk of how hard it is to find money today. There are more and more products and programs being designed to be more inclusive. Check into the 203k rehab loan program and 203k consultants can help you do just that.

Photo Credit: Juhan Sonin

Author

Random Articles

How The Roofing Industry Looks

Roofing, both commercial and residential, is a multi-billion dollar industry. Residential roofing is growing on a regular basis. It is estimated...

Roofing / Gutters

Adding a Bean Bag Chair Can Create a Certain Ambiance in Your Home

Home improvement involves numerous tasks that can enhance the look of your home and increase its value. Even redecorating or updating a room can...

Interior Design / Decor

How to Choose House Plants to Match Your Interior

Introducing indoor plants are a great way to not only aesthetically enhance a space, but to add a feel of balance through nature into any space....

Interior Design / Decor

How To Make Money By Starting A Carpet Cleaning Business

Carpet Cleaning business is the business where you would be the sole proprietor of your own business. For a successful business, we require a...

Cleaning / Maintenance

Steps to Take When You Suspect a Blocked Drain

Blocked drains are sometimes really problematic to fix. Based on the location of the blockage and the type that it is, different steps need to be...

Plumbing / Basements

Actions

Contact Us | Submit Article | 411homerepair © 2021