WHAT IS THE LIMITED 203(k) PROGRAM?

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HUD has developed a new FHA insured mortgage program called the 203k Limited Repair Program that permits homebuyers to finance up to an additional $35,000 for TOTAL repair cost into their mortgage, to purchase and improve or upgrade the home before move-in, or to refinance an existing mortgage and add up to $35,000 for repairs or improvements. With this new product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

The following repairs can be financed with this program:

• Repair/Replacement of roofs, gutters and downspouts
• Repair/Replacement/upgrade of existing HVAC systems
• Repair/Replacement/upgrade of plumbing and electrical systems
• Repair/Replacement of existing flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Exterior and interior painting
• Weatherization: including storm windows and doors, insulation, weather stripping, etc
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwaves
• Improvements for accessibility for persons with disabilities
• Lead based paint stabilization or abatement of lead based paint hazards
• Repair, replacement or the addition of exterior decks, patios and porches
• Basement remodeling which does not involve structural repairs
• Basement waterproofing
• Window and door replacement and exterior siding replacement
• Well or septic system repair or replacement

This program can also be used with the purchase of a HUD home, and in coordination with the Good Neighbor Next Door program.

WHAT IS THE STANDARD 203(k) PROGRAM?

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The Standard 203(k) program offers everything that can be completed in the Limited 203(k) program, but even more. 

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5,000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place.

• The types of improvements that borrowers may make using Section 203(k) financing include:
• Structural alterations and reconstruction
• Modernization and improvements to the home's function
• Elimination of health and safety hazards
• Repairs to pools that are in need of health and safety hazards
• Changes that improve appearance and eliminate obsolescence
• Reconditioning or replacing plumbing; installing a well and/or septic system
• Adding or replacing roofing, gutters, and downspouts
• Adding or replacing floors and/or floor treatments
• Major landscape work and site improvements
• Enhancing accessibility for a disabled person
• Making energy conservation improvements
• Conversion of a property of any size to a one-to-four unit structure
• Addition of ADU (Accessory Dwelling Unit)
• We use the value of the home AFTER it's renovated

Another added benefit of the Standard 203(k) loan, is in the event that the home will be uninhabitable during renovation, you can finance up to 6 mortgage payments into the loan, while waiting for the home to be in a condition that is it inhabitable again. (restrictions to apply).

This program can also be used with the purchase of a HUD home, and in coordination with the Good Neighbor Next Door program.

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WHAT IS THE HOMESTYLE PROGRAM?

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The Fannie Mae Homestyle Renovation loan is our standard renovation program for the conventional borrower (up to 95% Loan To Value).  With this program you can perform all of the same renovations as with the FHA 203(k) loan, but without all of the limitations FHA guidelines has.

This product does allow for luxury items that FHA does not, as in a swimming pool, a detached garage, or a gazebo.

The Homestyle renovation loan contains one application, one closing and one set of fees.  In the end all of the costs will be financed (up to 97% on a principle residence, 90% on a secondary home, or 85% on a ONE unit investment property).  That being said, if you wish to only finance 80%, you will have the option to avoid mortgage insurance.

Depending on the size of the project, changing a floor plan, or adding square footage, a consultant could be required. 

The types of improvements that borrowers may make using Fannie Mae Homestyle financing include:

• Structural alterations and reconstruction
• Modernization and improvements to the home's function
• Elimination of health and safety hazards
• Repairs to pools that are in need of health and safety hazards
• Installing a new pool
• Adding a detached garage
• Changes that improve appearance and eliminate obsolescence
• Reconditioning or replacing plumbing; installing a well and/or septic system
• Adding or replacing roofing, gutters, and downspouts
• Adding or replacing floors and/or floor treatments
• Major landscape work and site improvements
• Enhancing accessibility for a disabled person
• Making energy conservation improvements
• Conversion of a property of any size to a one-to-four unit structure
• Addition of ADU (Accessory Dwelling Unit)

Another added benefit of the Fannie Mae Homestyle loan, like the FHA Standard 203(k) is in the event that the home will be uninhabitable during renovation, you can finance up to 6 mortgage payments into the loan, while waiting for the home to be in a condition that is it inhabitable again. (restrictions to apply).

What is the FreddieMac CHOICE Program?

The Freddie Mac CHOICE Renovation loan is another standard renovation program for the conventional borrower (up to 97% Loan To Value).  With this program you can perform all of the same renovations as with the FHA 203(k) loan, but without all of the limitations FHA guidelines has.

This product does allow for luxury items that FHA does not, as in a swimming pool, a detached garage, or a gazebo.

The CHOICE Renovation loan contains one application, one closing and one set of fees.  In the end all of the costs will be financed (up to 97% on a principle residence, 90% on a secondary home, or 85% on a ONE unit investment property).  That being said, if you wish to only finance 80%, you will have the option to avoid mortgage insurance.

Depending on the size of the project, changing a floor plan, or adding square footage, a consultant could be required. 

The types of improvements that borrowers may make using Freddie Mac CHOICE Renovation financing include:

• Structural alterations and reconstruction
• Modernization and improvements to the home's function
• Elimination of health and safety hazards
• Repairs to pools that are in need of health and safety hazards
• Installing a new pool
• Adding a detached garage
• Changes that improve appearance and eliminate obsolescence
• Reconditioning or replacing plumbing; installing a well and/or septic system
• Adding or replacing roofing, gutters, and downspouts
• Adding or replacing floors and/or floor treatments
• Major landscape work and site improvements
• Enhancing accessibility for a disabled person
• Making energy conservation improvements
• Conversion of a property of any size to a one-to-four unit structure
• Adding/converting to add an ADU (Accessory Dwelling Unit) NEW

Another added benefit of the Freddie Mac CHOICE Renovation, like the FHA Standard 203(k) is in the event that the home will be uninhabitable during renovation, you can finance up to 6 mortgage payments into the loan, while waiting for the home to be in a condition that is it inhabitable again. (restrictions to apply).