FHA 203(k) Renovation Loan Specifics
I've been looking into using the FHA renovation loan. As I understand it allows general rehab up to $35,000 that can be financed into the mortgage. Does anybody have any experience with this loan and can help me understand what scope of work is allowed. Is this a useful loan for updates on the cosmetics of the house or is it just to bring the house to FHA requirements? Any input or advice would be greatly appreciated.
Most Popular Reply
@Andrew Sprague
I'm also looking to utilize this type of loan for my next multi family purchase. I spoke to my lender and below are some of the takeaways
Min. 3.5% down
1.75 % mortgage insurance premium baked into mortgage
Get appraisal based on the SOW (scope of work)
Estimate the ARV
Close on purchase
Renovations will be done after closure
bids for the rehab work need to be in prior to the appraiser inspecting the property so she can include those bids in the value of the home. The contractor will need to be fully licensed and bonded, and have at least several recommendations from their work for FHA to approve them and their bids.
I would recommend you speak to a loan officer as well to get the specifics for your deal.