The FHA 203(k) Streamline "Fixer Upper" Loan in MN

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An important tool for community and neighborhood revitalization, the FHA 203(k) loan offers flexible qualifying and low down payments:

• FHA standard guidelines
• Standard FHA down payment
• Flexible credit qualifying
• Assumable loans
• Finance up to 6 months of mortgage payments
• Purchase or Refinance and Improve all in one loan

The 203(k) loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

Made available to certain lenders by the U.S. Department of Housing and Urban Development (HUD), the FHA 203(k) program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a current home. The FHA 203(k) loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

There are two types of FHA 203(k) loans: Standard and Streamline. Standard is for repairs OVER $35,000, and few lenders offer this program. The other is for UNDER $35,000 in repair, and is called "Streamlined".

Mortgages Unlimited offers just the FHA 203K Streamlined Rehab loans in MN.   These loans offer the ability to finance upfront up to $35K in upgrades to rehabilitate a home. These are offered up to the maximum FHA loan limit in your county.

There is no doubt that the current real estate market offers a lot of great bargains on bank owned, Foreclosed, REO, Repo'd, etc homes. However,  many of these homes are in poor condition. Missing appliances, ruined carpet & flooring, holes in the wall, etc.  Most lenders don't offer loan programs that will be able to help folks buy homes in this condition.

This is where a little known program called the FHA 203K Rehab loan comes in. The FHA 203K Rehab loan is becoming very necessary for the purchase of many Bank Owned, REO, or Repo properties. Mortgages Unlimited offers FHA 203K streamlines loans to make the process of buying a home that needs a little TLC (or quite a bit in some cases!) easier, more affordable, and quicker. Many of us have seen firsthand, or have heard stories about foreclosed home that have been torn up, stripped, vandalized, etc. With conventional financing, these homes are very difficult to sell or buy, as they are not in move in condition, and most lenders will not lend on a damaged home.

Our FHA 203K Streamline program allows the homebuyer to put up to $35K of rehab work into the new loan. The loan closes 1 time. It is a permanent form of financing. The Streamline program should not be confused with the more complicated FHA 203K rehab loan, which can accommodate major remodels, major damage repair, storm damage, etc. The FHA 203K Streamline rehab loan is just that - Streamlined.

This loan can help with new paint (in/out), new siding, new roof, new flooring, new appliances, HVAC repair/replacement, electrical & plumbing repair & upgrades, new windows, decks, porches, patios, minor kitchen remodels, & more.

These loans are a key to helping homes become more accessible for disabled folks as the modifications can often be completed with a FHA 203K loan.

What it can't cover is landscaping, structural damage, foundation work, room additions, load bearing wall changes, etc.

There is no HUD consultant or general contractor required on the 203k streamline. However, we do suggest using a general contractor with a strong track record to ensure that your work is done & done right.

Please give us a call to find out if this loan is right for your next purchase,  your listing, or right for your next buyer that is looking at Bank-owned, REO, or Repo properties that are in need of TLC & repairs.

• 203K Eligible Borrowers:
  • Owner Occupants - Purchase - Refinance
  • Non- Profits
  • Investors NOT allowed
• Types of 203K Loans:
  • 30 or 15 year fixed rates
  • One year ARMS
  • Assumable to a qualified buyer, with no money down
• Eligible Properties:
  • Single family dwellings
  • Condominium
  • Townhouse
  • Mixed Use (Storefront)
  • 1-4 Unit buildings- you can increase or decrease the number of units with this loan.
• Structural Alteration and Reconstruction:
  • Changes for improved functions and modernization
  • Elimination of health/safety hazards
  • Changes for aesthetic appeal
  • Plumbing, heating air conditioning, and electrical upgrades
  • Well and/or septic repairs
  • Roofing, gutters and downspouts
  • Flooring, tiling and carpeting
  • Energy conservation improvements
  • Major landscape work and site improvement
  • Access for the disabled
• Home Inspection:
  The cost of your construction is estimated by an FHA Approved 203(k) consultant (estimator). The cost consultant assists you in determining the scope of repairs and the costs budgeted for the renovation job.
  • Perform a home inspection to create preliminary costs estimates based upon FHA minimum property standards plus the scope of work as defined by the home owner/buyer.
  • Once project has been determined, the cost consultant prepares a "work-write up" and 3 contractor bid packages are issued to the home owner/buyer.
• Appraisal:
  The appraiser will be given a copy of your "work-write up" to estimate an after improved value for your new or current home. We loan against that improved value thus allowing you to finance the cost of repairs.
• Other Eligible Costs:
  (THESE COSTS MAY BE FINANCED INTO THE MORTGAGE LOAN)
  • Contingency reserve (10-15%)
  • Up to 6 months PITI mortgage payments
  • Permit costs
  • Consultant fees
  • Inspection and title update fees
  • Architectural & Engineering fees (if needed)
• Here are a few suggestions to get you started:
  • Get pre-approved using our online application
  • Locate a home and submit a contract
  • Once the contract is accepted, contact us for the names of FHA approved consultants to get you started