FHA 203(k) - streamlined
The FHA 203(k) Streamlined program provides a single-close loan that enables a qualified borrower to purchase a home that may need repairs OR refinance there existing home for the purpose of remodeling. This program generates the necessary funds for renovation by financing the as-completed value, rather than the present value.
| Program Highlights | FHA 203(K) STREAMLINED |
| PROPERTY TYPE | 1- to 4- UNIT |
| MAXIMUM LTV RATIO | Purchase Maximum 96.5% LTV and refinance maximum 97.75% LTV |
| CREDIT SCORE | Minimum 620 credit score required |
| OCCUPANCY | Owner-occupied primary residence only |
| LOAN PURPOSE | Purchase and rate/term refinance |
| ELIGIBLE MORTGAGES | 30 year fixed rate mortgages |
| REHABILITATION PERIOD | Rehabilitation must begin within thirty day's of closing and be fully completed within a maximum of six months |
| SECONDARY FINANCING | Allowed |
| BORROWER CONTRIBUTION/DOWN PAYMENT | The minimum down payment requirement on purchase transactions is 3.5%; refinance may not require a down payment if the borrower has substantial equity in the home. |
| INTERESTED PARTY CONTRIBUTIONS | Up to 6% allowed to cover closing costs, prepaides, expenses, discount points and the other financing concessions. |
| AMOUNT OF REHABILITATION |
Minimum $5,000 rehabilitation costs and maximum $35,000 to be eligible, but the total value of the property must still fall within the FHA mortgage limit for the area; the value of the property is determined by either the value of the property before rehabilitation plus the cost of rehabilitation 110% of the appraised value of the property after rehabilitation, whichever is less; expenses eligible for inclusion in the cost of rehabilitation are materials, labor, plus expenses related to the rehabilitation such as permits, inspection fees, and lien protection fees for the title updates. Additional restrictions apply. |
| SELF-HELP |
Self-help arrangements in which the borrower is performing some or all of the work items are strongly discouraged unless the borrowers ability to perform the work in a competent, timely and workman like manner is self evident and easily documented. The self-help option is not allowed if any project for which permits will be required, unless the borrower is licensed contractor working in the specific field necessary for the rehabilitation. Additional restrictions apply. |
| ELIGIBLE IMPROVEMENTS |
The streamline FHA 203(k) program is intended to facilitate uncomplicated rehabilitation and /or improvements to a home for which plans, consultants, engineers and/or architects are not required; eligible improvements are limited and can not include any major rehabilitation or remodeling, new construction such as a room addition, repairs to structure damage or site amenity improvements. |
