FHA 203k Renovation Loan
For more info on FHA Financing;
FHA Standard Loan Amounts
- Maximum loan amount as determined by FHA (Conforming Loan Limits depending on location and number of units - below)
- Each county has its own individual area ceiling limit, and can be found here;
FHA 203k Product Overview
LTV Requirements: Maximum of 110%
1-2 units allowed (3-4 units by exception only)
***The Standard 203(k) requires a minimum repair cost of $5k and requires the use of a 203(k) specialist.
***The Limited 203(k) may only be used for minor remodeling and non-structural repairs. The Limited 203(k) does not require the use of a 203(k) Consultant, but a Consultant may be used. There is no minimum rehabilitation cost. Now allowing Manufactured Housing with the limited 203(k)
Maximum number of contractors: 3
Upfront MIP 1.75%, Annual MIP ranges depending on LTV, Base Loan Amount, and Term. See bullets below.
Repair Limits
- Renovation Total can be up to $35,000 in cosmetic repairs.
- This amount includes: 10% contingency reserve and all fees and costs listed in the fee section.
- Exceptions are not allowed to exceed the repair amount.
- Borrower is not allowed to fund overage.
Allowable Repairs
- Repairs and final inspection completed lesser of 180 days or as approved by the Renovation department
- Maximum repairs $35,000 (inclusive of all financed renovation fees). NO Exceptions.
- Roof: repair or replacement (covering, underlayment)
- Gutters/downspouts: install/repair/replace
- Insulation: ceilings/walls/asbestos removal
- Siding/windows/doors
- Paint: interior/exterior/lead paint abatement
- Kitchen: all appliances/cabinets/ total
- Electrical: repair/replace/recondition all
- Plumbing: repair/replace/recondition all
- Repair/Replace HVAC or other systems
- Repairing or removing an in-ground swimming pool
- Installing or repairing fences, walkways and driveways
- Flooring/subflooring/tile/carpet/wood
- Termite treatment/damage repair
- Repairing or replacement of well and septic- *See appraisal section of the guidelines for specific requirements
- Weatherization items/repairs/ improvements
Non-Allowable Repairs
- Structural or requiring engineers report or requiring blueprints
- Repairs performed by the borrower
- No Detached Garages
- No Swimming Pool Installations. Pool Repairs are allowed.
- Improvements that do not conform to the surrounding neighborhood
- Repair cost that exceeds $35,000. NO Exceptions.
- Any new construction including room additions.
- Landscaping or similar site amenity improvements.
- Any repair or improvement requiring a work schedule longer than six months.
- Rehabilitation activities that require more than two payments per specialized contractor.
- Major rehabilitation or major remodeling.
- Required repairs arising from the appraisal that Necessitate a “consultant” to develop a Specification of Repairs/Work Write-Up.”
- Require plans or architectural exhibits.
- Results in work not starting within 30 days after loan closing.
- Borrower is unable to occupy at closing or within 30 days.
- Television antenna and satellite dishes.
- Additions or alterations for commercial use.
- SFR conversion to a 2 unit
Contingency Reserve
- 10% of the cost of rehabilitation
- Properties where the utilities are turned off will require a 20% contingency.
Permits
- If permits are required to complete the improvements, you must have permits prior to any subsequent draws after settlement. No Exceptions
Borrower Acknowledgment
- Parties listed below are not eligible to perform the work:
- Borrower
- Family Member
- Borrowers Employer
- Seller
- Realtor
- Any Interested party to the transaction
Fees
- Single Fee: $550
Fee's associated with FHA Financing;
Upfront mortgage insurance premium (UFMIP), and
Annual insurance premium which is collected in monthly installments
Upfront Mortgage Insurance Premium - For 15 year and greater than 15 years.
- 1.75% of purchase price
Annual Insurance Premium
- Greater than 15 years & greater than or = 95% LTV - 0.85%
- Greater than 15 years & less than 95% LTV - 0.80%
- Less than or = 15 years & Greater than 90% LTV - 0.7%
- Less than or = 15 years & less than 90% LTV - 0.45%
Annual Insurance Premium For Higher Balance Loan Amounts - Greater than $625k
- Greater than 15 years & greater than 95% LTV - 0.105%
- Greater than 15 years & less than or = to 95% LTV - 0.1%
- Less than or = to 15 years & greater than 90% LTV - 0.95%
- Less than or = 15 years & less than or = to 90% LTV - 0.7%
- Less than or = 15 years & less than or = to 78% LTV - 0.45%
STATES WE LEND IN:
Alabama, Alaska, Arkansas, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming
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