When it comes to home renovations and repairs, costs add up if you’re paying out of pocket. If you’re considering a 203-K, it’s important to know the loan is designed specifically to help those who need it most. In fact, there are several qualifications you must meet to obtain this loan.
To qualify for a 203-K , a homeowner must meet the requirements laid out by the Department of Housing and Urban Development. This includes finding a property that needs cosmetic attention or major updates, having a qualified lender, meeting the requirements of a lender, minimum credit score, low debt-to-income ratios and proof of income. These requirements will determine if you are a good fit to take out a rehab loan for a property you wish to purchase and improve.
This loan works like any other type of home loan – you’re approved and set to close on a specific date. After closing, a repair escrow account is created and the repairs are required to start within 30 days. All repairs must be completed within six months.
203-K loans are intended to help homeowners improve their existing home or buy a new home that can significantly benefit from a face lift. If you’re thinking about finding a new home to bring up to your standards, reach out to the Housing Buzz Team today!