Faha 203 Case Study

750 Words 3 Pages
FHA 203(k) Loans Come as Two Types with Their Own Features
The FHA 203(k) loan program solves a difficult problem for first-time home buyers who need a mortgage and a home renovation loan. When buying a home that needs repairs, banks will not grant a mortgage until repairs are complete. But, until you own the home, repairs cannot be made. The FHA 203(k) program is a loan for home renovation combined with an FHA-insured mortgage. This means you make one application and pay one monthly payment. As soon as your loan closes, the portion of the loan for home renovation is escrowed and distributed to the contractor per a schedule of payments. The minimum amount of an FHA 203(K) loan is $5,000.
There are two types of FHA 203(k) loans they are,
1. Streamlined; and
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Fortunately, much of the work deemed ineligible for a streamlined FHA 203(k) loan can be financed with a Standard FHA 203(k) loan. Often, the Standard loan is called a Consultant loan. These loans offer all the features of the 203(k) program but are for more complicated and more expensive projects. Consultant (k) loans include the following types of work,
• New Roof
• Full landscaping
• Structural improvements or repairs
• Projects in excess of $35,000
• Home additions (a new room or adding a second

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