What Are The Requirements To Qualify For Florida FHA 203k Loans
This BLOG On Florida FHA 203k Loans Was Updated On April 29,2017
Gustan Cho Associates are experts in Florida FHA 203k Loans. Florida FHA 203k Loans require minimum credit scores of 580 FICO. The Gustan Cho Team does not have any lender overlays on FHA Loans and are specialists in originating and funding Florida FHA 203k Loans.
HUD Section 203(k) insurance enables home buyers to purchase a home that is in need of rehab with a combo home loan that includes the acquisition and rehab costs all in one single loan closing.
Here Is How Home Purchase Florida FHA 203k Loans Work
- Home buyers can purchase a tear down or home that is not habitable and need in rehab with an acquisition and construction loan
- Florida FHA 203k Loans: Lenders require that borrower will need 3.5% down payment on the after improved value
- FHA 203k Streamline Rehab Loans allows a maximum construction budget of $35,000
- There are no maximum construction budget with a full standard FHA 203k Loan. Maximum loan amount is the FHA Loan Limits
- Only one to four unit owner occupant properties are eligible for 203k Loans
Here Is How Refinance Florida FHA 203k Loans Work
Current homeowners that need a rehab loan can do it with a FHA 203k Loan.
Here is how it works:
- The current loan will be paid off with the new FHA 203k Loan
- There is a construction budget reserve
- Once rehab is complete, the FHA 203k Loan will be a 30 fixed rate mortgage FHA Loan. No need to refinance again unless the homeowner can get net tangible benefit
Construction And Acquisition Loans In Florida
Gustan Cho Associates has several types of Acquisition and Rehab Loans available in the state of Florida:
- Florida FHA 203k Loans
- Fix And Flip Loans
- Hard Money Loans
Florida Fix And Flip Loans
The Gustan Cho Team has fix and flip rehab loans.
Here is how fix and flip rehab loans work:
- 15% down payment on home purchase
- 90% financing on rehab costs
- 9 months interest only
- For investment properties only
Here is how hard money loans with rehab costs work:
- There are two types of hard money loan programs: Owner occupied and non-owner occupant investment property loans
- 25% down payment on home purchase and 25% down payment on rehab costs
HUD Section 203(k) Mortgage Insurance
Under HUD Section 203(k) Mortgage Insurance , home buyers can purchase a home that is not habitable which includes foreclosures and can obtain an acquisition and rehab combination mortgage loan called FHA 203k Loans. When purchasing a home that need rehab, buyers normally have to abide by a process streamlined by HUD. There are two types of 203k’s:
- 203k Streamline which is a maximum construction budget of $35,000
- Full Standard 203k Loans: No construction budget limit
Here is how it works
- With Streamline 203k, homeowners cannot do any structural changes or room additions
- Full Standard 203k, homeowners can do cosmetic, structural, and room additions
Florida FHA 203k Lenders
HUD 203k mortgages offers homeowners to have an acquisition and construction loan with one loan process and closing with low down payment. Home buyers of fixer uppers can now purchase a home in need of rehab and do a complete gut rehab with only 3.5% of the after value of the home. Most construction lenders require 30% or more equity but not with a HUD 203 rehab loan.
Basics Of HUD 203k Loans
The type and extent of the construction covered by Section 203(k) mortgage insurance ranges from minor cosmetic repair to a full gut rehab construction project. Only one to four unit residential owner occupied units qualify for this program.
The types and scope of construction that borrowers qualify in using Section 203(k) financing include:
- Structural changes and room additions
- Updating the home externally and internally
- New appliances
- Updating home with health and safety defects and hazards
- Cosmetic repairs which include replacing roof, siding, windows, gutters, and other cosmetic features
- Minor and major plumbing, electrical, HVAC, and septic/well systems
- Refinishing and/or replacing floors, millwork, kitchens, bathrooms, and basement remodeling
- Minor and/or major landscaping and lot improvements
- Handicap access to home: Exterior and interior
- High efficiency energy systems
Home buyers who have any questions on FHA Rehab Loans, please contact The Gustan Cho Team at 262-878-1965 or text Gustan at 262-716-8151 or email us at email@example.com.