In a nutshell, the 203K program is a lending program that provides for rehabilitation/remodeling of an existing home. You can remedy all those things that are wrong with the house, making it more energy efficient, more functional, and even prettier, and include it into your home loan.

There are two types of 203K loans: Streamline and Consultant. The streamline is just exactly what it says…faster and easier. It can provide financing in renovations up to $35,000, including, but not limited to, the following: roofing, HVAC, flooring, electrical, plumbing, painting, replacement of appliances, door and window replacements, well repair, weatherization, and improvements for accessibility for persons with disabilities. You should use a lender who is 203K certified and he/she will roll you into the loan.

Example: The house in question needs a roof, furnace, and the kitchen is a mess. The construction estimate is $10,000 to provide for a new roof, a new furnace, and upgrade the kitchen. The price of the house is $110,000; the renovation costs are $10,000. The loan amount would be $120,000, less 3.5% down. The house would be financed at the current applicable FHA interest rate and could close in 45 days.

The consultant 203K provides for more improvements, and can go to the loan limit. It provides for structural changes. It needs a higher level of approval and can take several months of complete. All work must be supervised by a 203K HUD approved consultant. It can also provide up to 6 months of living costs if it is not habitable.

The 203K will help you get into a house you want, at a price you can afford.

Paul Wallin, Professional Realtor
208-288-2976
paul@idahorealtyinfo.com

thanks Gail… great info!