FHA 203K Streamline Renovation loans in KY

general information on the 203k

• Intended to assist homeowners with basic repairs and modernize home.
• Can finance up to $35,000 including reserves, etc.
• Repairs must begin within 30 days of close & be completed within 6 months.
• Property must be existing structure and completed at least l year.
• Owner-occupied; one to four unit properties permitted.
• Log homes, manufactured homes, or homes less than 1 year old are permitted.
• No improvements to detached structures or luxury items.
• The property must appraise to cover price plus repair and rehab cost.
• May finance 96.5% of price plus 100% of repairs and rehab, up to 110% of "As Completed" Value.
• FHA does not require a contingency reserve.  At the lender's discretion, reserves of the total renovation costs can be mandated to allow for cost overruns.  The reserves are part of your total $35,000.
• Finance inspections, 203k title updates, and required working permits are allowed in this cost.

Eligible Work Items for fha 203k

• Repair/Replacement of roofs, gutters and downspouts
• Repair/ Replacement of HVAC, plumbing and/or electrical
• Repair/Replacement of existing flooring
• Minor remodeling not involving structural work
• Exterior and interior painting
• Weatherization: storm windows & doors, insulation, etc.
• Appliances not exceeding $2,000 total cost
• Access improvements for persons with disabilities
• Repair/Replacement/Addition of decks, patios, porches
• Basement finishing/remolding not structural in nature
• Basement waterproofing
• Replacement of windows, doors or exterior siding

Ineligible Work items for fha 203k Streamline

• Any work involving relocation of a load-bearing wall.
• Any work requiring detailed or architectural drawings.
• New construction (including room additions).
• Landscaping or similar site amenity improvements.

fha 203k Contractors

• Try to use a contractor that will handle all the work and invoices. A General contractor is not required, but makes the process easier.
• Borrower selects contractor not the lender.
• Contractor must provide estimate for work to be done.
• Contractor must provide licensed and carry E&O insurance.

FHA 203k loan disbursements

• Two-party checks to Borrower(s) AND each Contractor.
• The first payment of renovation cost is at closing.
• The balance of costs will be released upon completion of all work, inspection by appraiser and title updates.
• Inspection is coordinated between Investor and Borrower.
• Any excess funds will be applied to principal balance of borrower’s loan.