The 203 K FHA mortgage program is administered by the Federal Housing Administration of the Department of Housing and Urban Development (HUD).
Section 203 K FHA mortgage allows qualified homebuyers and homeowners to finance the repair and rehabilitation of a single family house.
The FHA mortgage program is an important strategy of the Housing department in revitalizing communities and neighborhoods.
A 203 loan provides a special need usually confronted by homeowners. An owner whose house requires rehabilitation or repair or even modernization, usually has to undergo a costly and complicated process to get a loan for the purpose. These home improvement loans typically have high rates of interest and short periods for repayment.
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With a 203 k FHA mortgage, homeowners get a single, long-term loan that bears a fixed or adjustable rate of interest. Through this facility, homeowners save money and time. The mortgage lender is also protected as they are allowed to have the loan insured even before the value and the condition of the home may offer adequate security.
The HUD outlines the following top uses for the 203 k FHA mortgage program:
Rehabilitation that range from minor to virtual reconstruction (over $5,000 in cost).A demolished home is eligible provided the foundation is still in placeRehabilitation of the residential part of a property that contains non-residential usesConversion of a property to a one- to four- unit structure.The Housing department also outlines the following top improvements qualified under the 203 k FHA mortgage program:alterations to structure as well as reconstructionremoval of safety and health hazardsalterations that enhance appearancemodernizing the function of a homerehabilitation of plumbing system or the installation of a septic tank or well.Installation of additional gutters, downspouts and roofing.Installation of additional floorsLandscaping and site improvementsimproving access to disabled individualsand improvements that enable conservation of energy
The HUD emphasizes that luxury items are not qualified as rehabilitation cost. The department however, said homeowners can utilize the 203 k FHA mortgage program for financing painting and making room additions even if no other improvements are needed in the home.
Homeowners who are eligible under the 203 k FHA mortgage program are those who can meet the monthly home payments. Condominium units can qualify on the condition they meet certain guidelines under Fannie Mae, or they have been approved by the Federal Housing Authority or the Department of Veterans Affairs.
For updates on the 203 K FHA mortgage program and on general mortgage and foreclosure news visit Mortgage News Central.
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