This article is sponsored by our good friend at Mortgage Lending Solutions. If you would like to speak with a mortgage expert about getting a unique FHA loan that includes up to $35,000 extra for home improvements, Chris “CJ” Williams is the guy you want to talk to!
Are you the type of person that always sees the hidden potential in houses that could use a little bit of attention? What if there was a special kind of mortgage loan that would allow you to borrow extra money to make upgrades to the home you are buying?
According to Chris Williams from Mortgage Lending Solutions in Monaca, there is! What he is talking about is actually a special version of an FHA loan.
What is an FHA Loan?
FHA (Federal Housing Administration) loans are a group of mortgage loans made available through the U.S. Department of Housing and Urban Development.
The loan types are created to increase homeownership in the United States by creating loans with low down payment requirements, flexible credit requirements, and flexible options for the needed closing costs of a mortgage loan.
Where Does the Extra Cash Come Into Play?
An FHA 203(k) loan is an FHA loan where the mortgage also finances improvements to the house.
These special loans can be used for updates to make the house livable, such as new roof, furnace, and hot water heater. They can also be used to make improvements to a house, such as doing structural changes to the house to improve the house.
According to the HUD site, an FHA 203(k) loan is:
FHA’s Limited 203(k) program permits homebuyers and homeowners to finance up to $35,000 into their mortgage to repair, improve, or upgrade their home. Homebuyers and homeowners can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or an FHA appraiser.”
Homeowners can make property repairs, improvements, or prepare their home for sale.
Homebuyers can make their new home move-in ready by remodeling the kitchen, painting the interior or purchasing new carpet.
What Are the Types of FHA 203k Loans?
203(k) loans have a sub-loan called a 203(k) limited loan.
The 203(k) loan will allow the borrower to do any FHA approved improvements, up to the amount that FHA allows.
A 203(k) Limited or Streamline will allow only up to $35,000 of financed improvements to the house. Those improvements are limited to non-structural changes to the property.
What Can FHA 203k Loans Be Used For?
203(k) loans can be used for improvements as small as carpeting and painting of the house, all the way to adding rooms and changing the structure of the home.
What Are the Benefits of an FHA 203k Loan?
- The improvements are financed into the loan which only has one closing.
- The borrower is approved as an FHA loan, which allows very low down payment requirements.
- A borrower can use the 203(k) loan to refinance a current mortgage and add improvements to the house.
Who Would be Someone Who Could Benefit From an FHA 203k Loan?
- Buyers with limited down payment money, but want to buy a home and are willing and able to live through improvements.
- Buyers who want a large house and the only home they can find in their budget are “fixer-uppers.”
- Buyers who want to be in a certain area, but need a larger or better home than they can currently find.
- People who own a home, need to do improvements, and want to stay in their current neighborhood.
How Does MLS Service and Disperse FHA 203(k) Loans?
Mortgage Lending Solutions works with several different FHA lenders who offer well established 203(k) loan processes and products.
Mortgage Lending Solutions works closely with the buyer to walk them through the process of completing contracts, procuring improvement companies, clarifying the inspections and the fees and getting the borrower to closing fully informed.
Why Should Someone Be Interested in a 203(k) Loan?
A borrower would be interested in a 203(k) loan because they can purchase a home with a low down payment and still finance the improvements needed to make it a dream home!
By using one of these special types of loans, that fixer-upper in the nice neighborhood is suddenly attainable for a buyer that might not have enough savings to cover the cost of the necessary improvements. If you are willing to work hard to make those improvements, Mortgage Lending Solutions can help you take care of the financing!
Want to Learn More About 203(k) Loans?
If you’re interested in learning more about how an FHA 203(k) could help you, don’t hesitate to contact Chris “CJ” Williams at Mortgage Lending Solutions today!