203K rehab loans are also a type of FHA loans. FHA is part of the Department of Housing and Urban Development (HUD). Both, FHA and HUD operate through FHA-approved lenders, i.e. PrimeLending, and then we submit the applications to get the property appraised & the buyer’s check approved. PrimeLending will then fund the loan and HUD will insure it. HUD will not make direct loans to help people purchase homes.
203K rehab facts:
- Complete tear downs are premitted as long as part of the foundation remains
- Allowable repairs include : roofing, flooring, plumbing, foundation, mold remediation/removal, termite treatments, etc.
- The minimum amount for repairs on a full 203k is $5,000
- The max amount of repairs may exceed $150,000 with specific exceptions (maximum on Streamline $35,000)
- Repairs can be structural and/cosmetic in nature but must have a 203K consultant
- The property being financed must be a permanent residence
- The borrower’s primary residence must be in the United States
- Must also live and work in the United States
*Some items may be specific to the lender*
If you have any quesitons about 203K rehab loans, please leave a comment or send us a message.