Supreme Lending offers FHA 203(k) loans, a program insured by the Federal Housing Administration (FHA), to assist homebuyers and homeowners in financing both the purchase and refinance of a property and the necessary renovations or repairs in a single mortgage. Here’s an overview of FHA 203(k) loans and the program’s benefits:
1. Two Types of FHA 203(k) Loans:
· Standard 203(k): Ideal for substantial renovations, major repairs, and extensive remodeling projects.
· Limited 203(k): Suited for smaller-scale upgrades, cosmetic improvements, and minor repairs.
2. Renovation Financing: Borrowers can finance a wide range of improvements, from basic repairs to structural changes, including items like HVAC systems, roofing, flooring, plumbing, and kitchen or bathroom remodels.
3. Single Loan Structure: FHA 203(k) loans streamline the borrowing process by consolidating the costs of purchasing or refinancing a home and the expenses for renovations into one convenient mortgage.
4. Down Payment and Equity Requirements: These loans often offer lower down payment requirements, potentially as low as 3.5%, making them accessible to a broader range of borrowers. Equity requirements may vary based on the loan type and individual circumstances.
5. Property Eligibility: FHA 203(k) loans can be used for primary residences, including single-family homes, multi-family properties (up to four units), and certain condos, provided they meet FHA standards.
6. Contractor Standards: FHA requires the use of licensed contractors for renovation work to ensure compliance with local building codes and quality standards.
7. Interest Rates and Terms: These loans typically can offer competitive interest rates and flexible terms.
FHA 203(k) loans provide an excellent opportunity for those interested in purchasing a fixer-upper or upgrading their current property. It’s essential to understand all the terms, conditions, and responsibilities associated with renovation loans. Supreme Lending’s experienced mortgage professionals can help you navigate the process effectively and smoothly.