An FHA 203k rehab loan is a very well-liked loan used to fix up and repair homes. The 203K loan allows access to a government-backed loan program for needed funds. Think of this as a one-time close construction loan. At closing, the seller receives their money and the rest is put into an escrow account for the buyer to use for rehabbing the property. There are many features involved in the FHA 203k loan program and they have advantages linked with them.
Advantages of 203k Rehab Loans
Savings – Paying for upgrades/repairs to a home can be costly. The 203K program allows borrowers to finance the improvements into their new loan. This is a cost effective approach rather than paying for the upgrades prior to closing.
Great Properties Available – Buyers are allowed to finance the repairs and additional construction costs up front. This loan is designed for homes to be redesigned and fixed up.
Low Interest Rates – Historically, conventional home loans have higher rates than FHA Mortgage Loans.
Type of repairs suitable for a 203K loan: Repair, Replace or Upgrade
Roof, gutters, downspouts
Existing HVAC systems
Plumbing and electrical systems
Repair, replace or add exterior decks, patios, porches
Window and door replacement and exterior siding
Septic and/or well repair or replacement
Improvements for accessibility
Lead-based paint stabilization or abatement of lead-based paint hazards
Learn More About 203k
Watch our informational video about FHA 203k Rehab Loans: