Make your house your home! FHA 203k

FHA does it again.  In today’s tough economic environment the 203k program helps homeowners rehab and repair their properties.  They allow for improvements above and beyond the value of the house today.  For example, on a refinance transaction, the maximum mortgage calculation is based on the lesser of:

1. The existing debt on the property before rehab, plus the estimated cost of rehab and allowable closing costs, or
2. The lesser of the “As-Is” value plus rehab costs or 110 percent of the “After-Improved” value multiplied by the appropriate LTV factor.

So, simply stated, the cost of rehab plus closing costs can exceed the current value of the property – and in the case of example number two above, lend more than the property will be worth at completion.  This opportunity doesn’t currently exist anywhere else in the spectrum of mortgage products.  In times past, homeowners used HELOC’s or second mortgages to rehab or remodel their homes.  However, these programs never allowed for the amount financed to exceed the value of the property.

If you have been staring at the “To Do” list of home repairs now is the time to take a look at the FHA 203k loan program.  This is your chance to truly make your house your home.  Here is a short list of allowable repairs:

• Foundation Issues
• Termite/Pest Issues
• Completion of unpermitted structures
• Roofs, gutters and downspouts
• HVAC systems
• Minor kitchen and bath remodels
• Flooring
• Interior and exterior painting
• New windows and doors
• Weather insulation
• Decks, patios, porches, etc.
• Basement completion

In addition, there are further incentives for those folks who are interested in helping our environment by doing improvements that are Energy Efficient.  Under the Energy Efficient Mortgage Program a homeowner can finance into the mortgage 100 percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the homeowner.

Whether you are looking to make that kitchen new again or add an energy efficient improvement to your property please let American Heritage Lending help you investigate the FHA 203k loan program.  This article hasn’t even addressed the basic benefits that are enormous in value.  The loan is a brand new 1^st mortgage with current market rates, the mortgage interest is still tax deductible, the lender will handle of the paperwork required to do the loan and administer the draws between the contractor and the lender.

Please take the time to contact us today.   We can send you more information regarding this program and help guide you through the process of obtaining funds for your improvements!