If you are seeking to buy property in Connecticut that is located in a federally-targeted area or a home that will require repairs, you may be eligible for FHA 203K rehab loans and 203K Streamline Rehabilitation Mortgage programs. Financing is available for qualified buyers who will maintain primary residence in a home that needs repairs or one that is located in neighborhoods that have been designated as needing revitalization by the government. Ideal for first-time and previous homebuyers, the FHA 203K loans offer financial assistance to buyers who will improve the property they purchase, helping to raise the value of homes and neighborhoods.
What Does the Loan Cover?
The FHA is the Federal Housing Authority and instituted the 203K loan program to encourage lenders to fund seemingly risky home purchase with the goal of neighborhood revitalization and greater homeownership opportunities for more people. FHA 203K loans are designated for house that are damaged or in need of rehabilitation. The loan covers the cost of the property and necessary home repairs. Homeowners whose homed need improvement can also refinance with a 203K loan.
Types of FHA 203K Loans
There are two types of FHA 203K loans, regular and streamlined. Regular 203K loans are for homes that need structural repairs, and streamlined loans are for those that need non-structural repairs. To qualify for a 203K loan, residences must be:
- Tear downs: As long as part of the foundation will remain, houses that need to be destroyed and rebuilt are eligible
- Existing construction that is at least a year old
- Single-family, two-family, three-family and four-family homes
- Mixed-use properties
- Homes needing to be moved to rest on a new foundation
FHA 203K loans include the price of the home plus the expected price of repairs. The homebuyer has to provide a percentage of the loan as a down payment. Applicants need to provide proof of income, proof of assets and credit reports. If you are applying for a 203k loan you also need to provide a home appraisal, including how much the home will be worth after improvements are made and also a detailed proposal of the work required on the home, including a cost estimate of each repair.
We're not just your mortgage broker, we're your neighbor.
At L'Altrella Lending Group we offer solid counsel for buyers looking to qualify for a 203K loan. Having all the paperwork in line for the eligibility process can be daunting and with a mortgage professional from L'Altrella Lending Group on your side you can navigate the application quickly and get started on fixing up your new home.