203K Rehab Mortgage Loans

203K Rehab Mortgage Loans

Here at Hawaii Mortgage Expert, LLC, we help our clients with 203K Rehab Mortgage Loans in order to make minor changes or remodeling to their homes. The 203K Rehab Mortgage Loan, also known as the FHA 203(K) Rehab Loan, was created for buyers who are interested in improving their home with new or separate loan through financing. The types of properties available for this loan are:

  • Ones that have been completed within at least one year
  • Has to be a one to four family residence
  • A single family tow home or condominiums (Cooperatives do not apply)

If your property meets the requirements for this loan program, there are two different FHA 203(k) loan programs eligible for you. The first loan is called the Streamlined K, which is used for any buyer wanting to make minor changes to their home, with a limited remodeling fee of $35,000. Below are the types of works allowed and not allows for the Streamlined 203(K) loan: Work – Allowed

  • Repair, replace or upgrade
  • Roof, gutters and downspouts
  • Existing HVAC system
  • Plumbing and electrical systems
  • Flooring
  • Painting
  • Appliances
  • Weatherization
  • Repair, replace or add exterior decks, patios, porches
  • Basement waterproofing
  • Window and door replacement and exterior siding
  • Septic and/or well repair or replacement
  • Improvements for accessibility
  • Lead-based paint stabilization or abatement or lead-based paint hazards

Work- NOT Allowed

  • Major structural repairs
  • New construction (adding room)
  • Repair of structural damage
  • Repairs requiring detailed plans and specs
  • Any repair taking more than 6 months to complete
  • Repairs that would necessitate more than 2 draws
  • Luxury items that are not a permanent part of the real estate
  • Granite, marble countertops, Jacuzzi tubs, hot tubs, pools, etc.

The other type of loan is the Standard FHA 203(K) loan gives the ability to buyers to make considerable structural changes, such as improvements, repairs, remolding or updates to their home. This loan also presents the opportunity for buyers to build a new home, if they desire to. Here is the list of the different types of work eligible for the Standard FHA(K) loan: Work – Allowed

  • Structural alterations and additions
  • Garage
  • Attached unit (new)
  • Remodeled kitchen and baths
  • Changes to eliminate obsolescence and reduce maintenance
  • Modernize plumbing, heating, A/C and electrical systems
  • Install or repair well or septic systems
  • Roofing, gutters and downspouts
  • Flooring, tiling, and carpeting
  • Energy conservation improvements
  • Major landscaping
  • Improvements for accessibility
  • New non-attached appliances
  • Swimming pool repairs

Overall, the 203K Rehab Mortgage Loan program gives you the advantage to save money, gain low interest rates and opportunities for property deals. Here are some of the advantages available to you:

  • Home improvements with a new loan
  • No payments for upgrades prior to loan closing
  • A financing program with lower rates
  • Financing for home improvement (construction cost/repairs)

If the buyer has applied and been accepted for this loan program, they must have their contractor complete the following duties, in order to commence the changes, repairs or improvements:

  • Provide a written work plan along with cost estimates
  • Include the nature, type of repair and the cost of completion
  • Must of proof of license and assurance for each specialized repair
  • Provide a written agreement to complete the work for the amount cost estimated within the allowed time