Financing Charlotte Homes: What is an FHA 203(k) Rehab Loan?
There has been much talk lately of the 203k rehab loans offered through the Federal Housing Administration (FHA). These loans have been around for quite some time but, have recently become a more popular form of financing due to the increase in distressed/foreclosure properties in the Charlotte area. If you’re rehabbing a Charlotte home, it might be just the best loan for you.
What is a 203(k) Loan?
The FHA developed the 203(k) program to help revitalize/rehabilitate homes throughout the country. This program provides insured loans that can also be used to rehab, rebuild or modernize existing Charlotte homes.
What are the Benefits of a 203(k) Loan?
This is a one-stop loan, meaning that one loan finances both the purchase and rehabilitation of your property.
The mortgage amount is based on the projected value of the property after the work has been completed. The mortgage takes into account the cost of the rehab including labor charges, permits, drawings, etc. The mortgage cannot exceed 110% of the "As Repaired Value." FHA approved lenders offer this program and it can be combined with other approved programs.
Who is Eligible for a 203(k) Loan?
This program is open to individuals as well as non-profit organizations.
What Properties are Eligible for 203(k) Loans?
The 203k loan can be used to purchase and rehab one- to four-family dwellings that have been completed for at least one year. For all the additional eligibility requirements, carefully review the “Eligible Property” section on the web page about 203(k) loans.
If you’re looking at Charlotte homes for sale, whether you’re using an FHA loan or not, I can help. Give me a call or email me today.