FHA 203k
The Section 203(k) program is FHA’s primary program for the rehabilitation and repair of single family properties, 1-4 units. The objective is to enable HUD to promote and facilitate the restoration and preservation of the Nation’s existing housing stock.
A common option for a buyer purchasing a home with needs for repairs is construction financing, usually at a high interest rate and very tough qualifying guidelines. This type of financing is typically broken into 2 loans; a temporary loan for costs and interest and a second, permanent feature, for the remainder after completion. Many times these rates are much higher than market rates.
The FHA 203k program, which follows FHA qualifying guidelines, allows a buyer to finance the acquisition cost and repair costs into one, permanent loan in the beginning and obtain current FHA rates for fixed or adjustable mortgages. Funds are based of the costs for repair and the anticipated value of the property.
Properties that are eligible are 1-4 family dwellings that have been completed for at least one year.
Fannie Mae HomeStyle Renovation Program
The HomeStyle Renovation mortgage program allows borrowers to combine the cost of the home with the costs for renovation or remodeling. At closing, all funds for renovation will be escrowed in an interest-bearing account. After all renovation work is complete, any remaining funds in the escrow account will be used to pay down the principal balance of the mortgage.
Fannie Mae HomeStyle Renovation Loan Highlights:
- Up to 95% LTV
- Renovation funds escrowed in an interest bearing account
- Soft costs (architectural services, engineering, permit fees, etc.) may be financed
- Loans are underwritten to FNMA guidelines
HomeStyle Renovation Loan LTV Requirements:
- Primary Residence – Up to 95% LTV
- Second Home – Up to 90% LTV
- Investment Property – Up to 75% LTV
Fannie Mae HomePath Renovation
- One loan to fund both your purchase and light renovation
- Low down payment and flexible mortgage terms
- Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a secured loan from a nonprofit organization, state or local government, or employer
- No mortgage insurance*
- Available for primary residences, second homes, and investment properties
