203k streamlines — and how they can be used to buy foreclosures and build equity, etc…

In the southeast valley, there are currently more than “just a few” homes that are currently either in foreclosure or owned by banks. Some of these properties can be had for a great deal but they will require a little “TLC” before you might be ready to actually live in them.

If you are looking at buying a home that needs a few minor repairs before you live in it, the FHA 203k streamline program is designed to let you access repair money as part of the purchase of the home.

FHA 203k Streamline Program

The FHA 203k streamline loan is designed to allow people who want to purchase a home in need of a few repairs to buy the home using a base loan and then have money for planned repairs or improvements escrowed and paid directly to the contractors.

For the FHA 203k streamline program, you can have up to $35,000 set aside for repairs and while there are a few “extra” steps to the loan, it is not significantly more difficult to qualify for and get approved for a regular FHA loan.

Top FHA 203k Streamline Repairs

Some of most popular improvements that people use the FHA 203k streamline program for include:

• Kitchen remodeling
• Bathroom remodeling
• Termite damage repair
• New exterior work (stucco)
• Plumbing fixture repairs
• Upgraded or installing new flooring
• Roof repairs or an entirely new roof
• Installation of new smoke detectors
• Landscaping improvements

How FHA 203k Streamline Funding Works

When you buy a house using a FHA 203k streamline, up to 50% of the money set aside for property improvements disbursed immediately. Normally, if money is disbursed at closing, an instruction letter from the lender is issued with details of what is required for the second and final disbursement.

Once all work has been completed and approved, the final disbursement can be issued from the lender and paid directly to the contractors. If the work that has been done is $15,000 or more then a final inspection by an FHA appraiser is required. If the work is less than $15,000, then no final inspection is required.

Instant Equity: The FHA 203k Streamline Makes It Possible

Many times, if a home “needs a little work”, buyers will pass on it in favor of a home that is “perfect”. This provides you a real opportunity to build equity by “buying low” knowing that you can get the needed money for repairs as part of the normal FHA loan process.

So if you are in the market for a home and are willing to put a little bit of extra work in to improve the home, the FHA 203k streamline is a great option and can help you get the money needed to truly make improvements so that your new home becomes your dream home.

Justin McHood is a nationally published mortgage expert who lives and works right here in Arizona. You will normally find him wearing a blue starched shirt (he says that it goes well with is orange hair) and you can learn more about him at www.ArizonaMortgageTeam.com.

Tagged as: 203K, FHA, financing, loans