The FHA 203(K) Renovation loan allows you to purchase (or refinance) and renovate a property with one loan and one closing. With one loan, there is only one application, one set of fees, one closing and one monthly payment. Improvements can include anything that adds value to the home. The loan can also be used for energy-efficiency improvements. A 203(K) loan can create huge value for home shoppers looking to:
1. Purchase a rehab in a high priced neighborhood.
2. Include all upgrades and repairs in one loan.
3. Purchase home with only 3.5 percent down payment on the total sales price plus the cost of repairs.
4. Streamline the process because closing occurs first, followed by repairs.
5. Replace anything from carpet, paint, appliances, fixtures, windows and more, and include in the financing.
6. Upgrade by adding additions and improving landscaping.
7. Repair damages to the home such as the roof, fire damage, termite removal and mold mediation.
8. Maximize property potential. Loan is based on the value after improvement.
9. Customize the home to your taste.
10. Purchase and rehab a foreclosure.