Renovating a house can seem daunting, but with the right plan and loan in place it could quickly become your dream home! Using an FHA 203k renovation loan is becoming increasingly popular to update existing properties – find out why you would want to choose this instead of building from scratch.

If you’re looking to buy a fixer-upper and make it spectacular, then the FHA 203k loan is your answer! This mighty mortgage can help revamp homes that need major work – from outdated flooring all the way up to ADA Compliance needs. Not only will this special loan provide an extra layer of protection for any potential safety hazards or structural issues, but it even allows borrowers to add on things like new roofs and mold remediation. Take your project home beyond just pretty with the power of an FHA 203K Loan! Let’s take a look at some things to consider before trying to apply for an FHA 203K.

#1

If you’re considering a FHA 203k loan, there are two options – one with limits and the other offering up to $35,000. While that might sound like plenty of cash for house renovations at first glance, anyone who has done home renovation projects recently knows it can evaporate in no time! So be sure to do your homework before deciding which route is best for you.

#2

If you’re looking to purchase a fixer-upper and wondering how it all works, we’ve got an answer. With the Foreign FHA 203k loan option, only needing as low as 500 credit score in some cases – there’s hope for your dream home! All you have to do is put down an offer on the house that needs work (like $200K) with 80K extra from the bank to cover renovations– and voila! Your old rusty two hundred thousand dollar diamond in the rough will now be worth 280 grand after renovation costs are cleared up, therefore your down payment on an FHA 203K would be three and a half percent of two hundred and eighty thousand dollars.

Instead of breaking the bank on a brand new home, why not consider an FHA 203K ? With this hip mortgage option, you can save big while still getting your dream custom build—all with only 3.5% down! So put more money in your pocket and start building those castle walls today!

#3

Are you looking to take on a home project but don’t want any legal drama? Well there are some conditions: only licensed contractors with insurance can do the bulk of it, and unfortunately Uncle Joe who does handyman stuff as a side gig won’t cut it. But not all hope is lost; if your DIY skills are up-to-snuff, you could be allowed to contribute 10% in “Sweat Equity”, which usually refers to painting or landscaping work. So get crackin’!

Looking to get your hands on a shiny new FHA 203K Loan but don’t understand how it all works? Don’t worry, we’ve got the answers! Instead of borrowing more than is necessary just because you’re unsure what will be left after renovations, this loan allows you to borrow up 110% of the present value or purchase price plus repair costs- whichever amount turns out smaller. Now that’s savvy money work!

#4

Closing an FHA 203k loan may seem like a daunting task, but with 90 days of patience and around six months for the work to be completed – it’s certainly doable. Navigating such uncharted waters might not always be easy as these loans are far from common practice; however, much simpler processes can often accompany new construction loans since builders have plenty of experience in getting them done! So if you don’t have a good team on your side for an FHA 203K that it might feel horrible but if you have a good team on your side then it should go fairly smoothly and you’ll get a beautiful house at the end.

#5

When you’re out shopping for a loan on your new construction, interest rates can vary widely. Conventional loans typically follow market trends, but FHA 203K s come with an additional price tag: one to one and a half percent higher than the current rate! So if regular buyers are getting 6.5%, prepare yourself to shell out 7.5-8% when opting into an FHA 203K program – after all, it is the cost of having that low down payment plus government backing in tow! Now you will have the option typically to refinance out of your FHA 203K after you finish the work into a regular FHA or conventional.

Marcie Billen is the go-to real estate agent in Oklahoma City. If you’re moving from out of state, here are my relocation guides. If you’re looking for an FHA 203K, reach out by scheduling a call below and I can connect you with some local lenders who would be happy to help you get the process started!