1. The Standard 203k is intended for more complicated projects that involve structural changes such as room additions, exterior grading and landscaping, or renovation that would prohibit the buyer/owner from occupying the residence. A Standard 203k is also used if your project requires engineering or architectural drawings and inspections. Under this program a single family property may be converted into a two-, three- or four-unit dwelling or vice versa so long as the owner occupies one of the units.
2. The Streamlined 203k is designed for less extensive improvements that are non-structural in nature and do not exceed $35,000 in total cost. This version does not require the use of a consultant, architect, and engineer or as many inspections as the Standard 203k, thus being the simpler, less costly option.
No matter whether a new purchase or a refinance, there are many benefits to using the 203k loan program, including the following:
•Only a 3.5 percent down payment is required, which can be gifted by family members or close friends •Borrowers can qualify for loan amounts of up to 110 percent of the after-repair value of the home •Homeowners with as little as 5 percent equity based on the current value of their home can qualify for refinancing •More flexible qualification requirements allow buyers with less than perfect credit to purchase a home at competitive rates •Financing the purchase or refinance of the property can be consolidated into one loan including the improvements -- saving both time and money •15- and 30-year loans are available, and interest rates can be variable or fixed •FHA loans are assumable with no prepayment penalties •An FHA Energy Efficient Mortgage (EEM) allows the borrower to qualify for a larger mortgage to add improvements that will lower utility expenses •Can be used for a variety of improvements from the most simple to very complex •Renovation costs are wrapped into the mortgage, allowing the borrower to pay for the improvements over time at a much lower interest rate than conventional alternatives •Rather than paying a premium for a home in "perfect" condition, buyers can take advantage of discounted prices available on foreclosures or other homes on the market that are in need of repair or remodeling •Instead of paying for a previous owner's improvements, 203k allows the buyer to renovate the home adding the features, colors, styles, etc. that suit their tastes and needs •Using the program could allow a buyer to purchase more home for the money in a more desirable location
For more information about the 203k program, and to find a local expert, go to www.realtytrac.com/203k.
View a recording of a webinar conducted by RealtyTrac and REbuildUSA titled Finding & Financing Fixer-Upper Bargains at https://www3.gotomeeting.com/register/622873342.
About RealtyTrac Inc.
RealtyTrac (www.realtytrac.com) is the nation's leading source of comprehensive housing information, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 95 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts®. RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate.
Founded by Dennis and Teresa Walsh, REbuildUSA (http://rebuildusa.com/) was established to help open up home ownership to many more Americans, while bringing new business to lenders, real estate professionals and the home renovation industry. REbuildUSA live presentations, webinars, and designation courses have been presented to more than 150,000 real estate professionals throughout the U.S. Canada and beyond, and the Walshes recently co-authored a book titled "Real Estate's Best Kept Secret" that incorporates their vast knowledge of the 203k loan into a comprehensive and easy-to-understand resource.
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