FHA 203k streamline loan helps buyers of single family homes renovate and wrap up the renovation costs in to the loan. This is a great program for people buying distressed homes or dated property.
I recently completed my first 203k FHA loan with a young couple purchasing a home in Historic Kenwood, the deal wasn’t as simple as the story below. Our deal was a “short sale” and the buyers didn’t know about this program until after the home inspection revealed several problems that would have prevented our purchase with a normal FHA loan. This home needed electrical updates and plumbing issues as well as pealing paint on the out side of the home.
FHA sends out an inspector, if the home isn’t in good shape they will not fund the loan. In our case the seller wasn’t able to make the repairs so the 203k was our best option.
It did take several months to close due because we needed to renegotiate with the sellers lender on the sales price because of the updates and repairs needed. The FHA 203k loan was the only way they would have been able to buy this home so in the end it all worked out. (Just a FYI the 203k loan does take 90 days + & the cost of the loan is higher.)
If you’re finding all the homes in your price range need of updates (no structural work) the FHA 203k loan maybe a great option.
RisMedia story on a 203K loan