FHA 203(k) Streamline Loans

In many home purchase transactions where the subject property is in need moderate repairs, borrowers, and their Realtors, find themselves in a Catch-22 situation - banks won't lend money to buy the house without the repairs being made, and the repairs can't be made until the home has been purchased.

Enter HUD's 203 (k) Streamline Program. This loan will enable the borrower, with a down payment as low as 3.5%, to obtain financing that will cover the acquisition cost, plus the costs of making necessary repairs and improvements. In most cases, the work will need to be performed by a licensed contractor, and the plans need to be prepared and approved by the lender during the loan approval process. The borrower can obtain up to $35,000 for these repairs, and draw funds from an escrow account established by the lender at the close of the transaction to pay the licensed contractor at the completion of the repairs. This loan affords the borrower up to 6-months to complete the work, and the final disbursement will only be made after a HUD-approved inspector verifies that the repairs stipulated in the contract have been completed. These repairs must meet HUD's Minimum Property Standards, and all necessary permits must be obtained to meet all applicable building codes.

Under the right circumstances, these loans can be a real benefit to borrowers who are unable to cash flow needed repairs. The final loan amount is based upon the After-Improved Value of the property. Feel free to contact me to discuss the benefits of these loans. I can be reached at 888/627-2002 or kkertin@gmail.com