10 FHA 203k Benefits to Realtors® & Lenders
- Increase income by selling more homes and originating more loans
- Raise real estate values by improving homes and neighborhoods
- Decrease foreclosure inventory
- Help buyers who previously could not buy homes
- Avoid appraisal concerns (go up to 110% of ARV)
- Help seller/owners with properties in outdated or fix-up condition
- Spur economic growth by creating job opportunities for the construction/remodeling industry
- Promote an under-utilized niche program that not many Realtors® or Lenders understand
- Be more efficient with your time by showing fewer properties
- Revitalize your community
10 FHA 203k Benefits to Home Sellers
- Market property to more buyers
- Allow buyers the opportunity to renovate, upgrade or improve to suit their tastes and preferences
- No need to settle for low-ball cash offers
- Current condition of property not required to meet FHA’s property standards
- Buyer is permitted to correct any property deficiencies after close of escrow
- No more inspection concerns
- Absolutely no repairs are required prior to close of escrow
- Seller not responsible for cost of repairs/improvements
- Transaction will close with property in “AS-IS condition
- Closing occurs in 45 days
10 FHA 203k Benefits to Homebuyers
- Low down payment (3.5%)
- Renovate a home with little or no additional out-of-pocket costs
- One mortgage for purchase + renovation money
- No out-of-pocket mortgage payments for 1 year
- Purchase offer is stronger when properly presented properly to seller
- Buyers have less competition to buy fixer-uppers, foreclosures or older homes that are outdated
- Better opportunities for “good deals” on home purchases
- Ability to purchase properties that may not meet FHA standards and complete the repairs/improvements AFTER the home is purchased.
- Buy any residential propety in any condition (condos, townhouses, mixed-use, multi-family, single-family) even those that do not currently meet FHA standards
- Home buyers can do their own improvements after closing using the buyer’s own style and design.
Renovate Your Home with an FHA 203k Loan
Smart home buyers are excited about buying a fixer-upper, foreclosure, or an older home. Informed home buyers are utilizing the FHA 203k loan to buy or refinance and renovate homes with little or no additional out-of-pocket expenses.
In fact, since 1978, the FHA 203k loan has been used by hundreds of thousands of savvy home buyers, home owners, contractors, real estate, and mortgage lenders.
An FHA 203k loan is very similar to the traditional FHA loan. The main difference is that the FHA 203k loan allows you to include additional money into your mortgage for repairs & improvements.
Traditional mortgages require the property to meet certain condition requirements before the home is purchased, but the FHA 203k loan allows you to buy the property AS-IS and complete the repairs & improvements after you own it.
The FHA 203k loan allows you to repair or improve a home without needing additional out-of-pocket money for the repairs & improvements.
The Standard 203k allows for complex rehab such as structural modifications, additions, landscaping, architectural/engineering drawings … up to $3.3Million in renovations – restrictions apply).
The Limited 203k is intended for uncomplicated and more simple rehab and will not allow for structural modifications, landscaping, etc. The maximum renovation cost for the Limited 203k is $75,000 (restrictions apply).
