FHA 203k Rehab Loans Georgia Mortgage Guidelines

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FHA 203k Rehab Loans Georgia Mortgage Guidelines

This Blog On FHA 203k Rehab Loans Georgia Mortgage Guidelines Was UPDATED On November 13th, 2018

The state of Georgia has one of the hottest housing markets in the United States.

  • Besides the great economy in Georgia, many home buyers are migrating to the Great State of Georgia because home buyers can still find reasonable home prices
  • Many Floridians are making their move north to Georgia because home values are 30% lower in Georgia versus Florida
  • Home buyers can get a lot of house for the money throughout the state of Georgia
  • Many Georgia home buyers are taking advantage of buying fixer uppers and foreclosures with FHA 203k Rehab Loans Georgia

A FHA 203k Loan is often referred to as Rehab Loans.

  • Rehab Loans enables home buyers to purchase a fixer upper or foreclosure
  • Buyers can purchase fixer uppers with an acquisition PLUS a rehab loan to finance a combination of a purchase along the renovation loan through a single mortgage
  • Homeowners can also refinance their current mortgage into Rehab Loans through a FHA 203k Loan

How Does FHA 203k Rehab Loans Georgia Work

Here is how Rehab Loans through FHA 203k Rehab Loans Georgia works:

  • Borrowers of Renovation Loans needs to qualify for a FHA Loan with regards to credit, debt to income ratio, and all FHA Guidelines
  • Minimum credit requirements to qualify is 580 FICO
  • Borrower can borrow up to the maximum FHA Loan Limits for their area
  • The amount of down payment required on FHA 203k Rehab Loans Georgia is 3.5% of the after improved value of the home
  • 203k Loans are only available for owner occupant primary residence one to four unit properties
  • Second homes and investment homes are not eligible for FHA 203k Rehab Loans Georgia
  • Homeowners can refinance their current home loan with a FHA 203k Refinance Loan if they need funding for repairs to their home
  • Streamline FHA 203k Loans have maximum budget of $35,000
  • Standard Full FHA 203k Loans have no maximum construction budget

Renovation Loans through the FHA 203k Loan programs allows home buyers or homeowners to do renovations to their homes without plenty of equity in their homes.

  • Home buyers can purchase a home that needs major repairs and improvements
  • They can gut and rehab that home
  • They can make it a custom home and even do room additions and remodel it the way they want
  • Most banks and lenders normally do not lend on properties that need repairs and are not habitable
  • With a FHA 203k Loan, home buyers can purchase any home that is not habitable
  • Borrowers can get the construction budget to make it into a new home

Qualification Requirements On FHA 203k Rehab Loans Georgia

As mentioned earlier, to qualify for FHA 203k Rehab Loans Georgia, borrowers needs to meet all of the FHA Guidelines.

  • However, there are property requirements that needs to be met as well
  • The United States Department of Housing and Urban Development is the parent of the Federal Housing Administration or FHA
  • HUD sets all FHA Guidelines

Here are the HUD Guidelines on FHA 203k Rehab Loans Georgia:

  • One to four unit properties that need updates, cosmetic repairs
  • Two types of Rehab Loans
    • Streamline 203k Rehab Loans
    • Standard 203k Rehab Loans
  • Need Scope of Work and cost of repairs
  • HUD Consultant required and on a Streamline FHA 203k Loan
  • Repair Escrow will be established after closing
  • All renovations needs to be initiated within 30 days of closing
  • Needs to be completed no later than six months
  • With Streamline 203k Loans, 50% of the construction amount is given upfront within 15 days of the closing of the loan
  • The balance of the construction amount is given at completion

Advantages Of Renovation Loans Through FHA Home Loans

The purpose of FHA 203k Renovation Loans is for home buyers to purchase a fixer uppers:

  • Buyers can purchase foreclosures or a home that is in the perfect neighborhood but that does not suit the needs of their family
  • They can benefits from updating the home or making major improvements to their home with funding for the rehab
  • Homeowners can do major room additions with a Renovation Loan
  • They can add bedrooms, bathrooms, and do a second story addition
  • Homeowners can also do a complete a gut rehab and customize it the way that suits their needs
  • It is like having a brand new custom built home
  • One of the major benefits with doing a renovations on a current home is creating instant equity
  • Most homes are valued with square footage
  • By adding on to an existing home and adding square footage, it will increase the value of the home

Home buyers can often get deals when buying a fixer upper or foreclosure where the home is not habitable.

  • Most lenders will not lend on a home that is not habitable or in need of major repairs
  • Buy buying such a home, and fixing it up, you can get instant equity

Home Buyers of fixer uppers or foreclosures who want to make a dream home or homeowners that needs to renovate their homes with FHA 203k Rehab Loan, please contact The Gustan Cho Team at Loan Cabin Inc. please contact us at 262-716-8151 or text for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays to take your mortgage inquiry.

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