Have you recently discovered cracks, gaps and crumbling where walls or floors and ceilings connect? How about breaks or slumps or cracks in the foundation of your house? Are your sill plates coming loose or perhaps they have moved?
Surprise discoveries like these are a great reason to look into low cost repairs and inspections for needed renovation. As a buyer or a homeowner, you have a little-known option called the FHA 203k.
This home improvement loan opportunity is backed by the Federal Housing Administration. Because it’s an FHA product there are several buyer benefits. As you already know, a low down payment is great for any buyer or homeowner looking to refinance.
Low Down Payment Requirement
The FHA 203k loan requires a 3.5% down payment for a home purchase. That’s much less than other programs that require up to 20% down.
Flexible with eligible-for-financing projects – FHA 203k has certain requirements in a house where it backs the mortgage loan. There are certain things that are easily funded such as flooring, no lead-based paint or mold– you can also finance desired improvements like a kitchen remodel, complete foundation repairs or vinyl replacement windows.
The FHA 203k considers after-improved value not just current market value – making improvements to the home will increase its value. The FHA loan is based on that value rather than on the current value like a home equity line of credit. It offers the ability to increase the value of your home without spending your own cash or savings, which can really support the stability of your retirement plans.
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Amortization Over The Life Of The Loan
With the FHA 203k loan, there is only one mortgage payment – this is not a second mortgage or a home equity loan. This is one mortgage payment and one low interest rate. It’s much simpler than borrowing on store credit, credit cards or a home equity line of credit.
The financing is amortized over the life of the loan. This is not a “12 months no interest” kind of deal – The cost of the home improvements or renovations stay with the home and is amortized over the life of the mortgage. If you decide to sell the house, those improvements are taken into consideration in the appraisal. Then they are paid off with the new mortgage and buyer.
Financing Renovations and Foundation Repairs
The Federal Housing Administration’s FHA 203k mortgage loan finances renovations. This is designed for people who cannot afford to pay for the home improvement up front. Several properties are eligible for 203k financing:
•Condominiums (provided they are FHA- approved)
•The residential parts of a commercial building e.g. the staff quarters
•An already built house being moved onto a new foundation
•One-to-four family residential properties
•Partly built residential property
*Commercial property is not eligible for an FHA 203k loan.
If you’d like to learn more about this home improvement option, talk to the experts at Holland Remodeling & Building. We understand the housing market, and can help you figure out the financing.
We are committed to the Akron Ohio community and provide every available support to our customers. Our testimonials say it all. Simply call 330-576-3895 for your free consultation, or visit our educational center online today.
The post How To Use an FHA 203k Loan for Akron Ohio Foundation Repairs or Renovation appeared first on Holland Remodeling & Building.
