fha 203k repairs Archives - FHA 203k Streamline

10 Essential Repairs Allowed Under the Streamline 203K Program-FHA203KSTREAMLINE.ORG The streamline 203K program allows you to purchase or refinance a home along with remodeling it or making repairs. The dollar amount of your repairs must be below $35,000 in order to qualify for the streamline program and nothing can be structural in order to qualify because this program does not require you to use a loan consultant, as the standard 203K does and it does not require you to provide any blueprints or plans. That being said, there are numerous repairs and changes you can do that will help you make your home safe, comfortable, and beautiful.

New or Repaired Roofing

The roof of your home not only provides curb appeal, it also keeps it warm and dry. If the home you purchase or even the home you live in has an older roof that is defective, the integrity of your home is at risk, which is why new roofing or even repairing your existing roofing is an allowed charge in the streamline 203K program.

New Flooring

The flooring in your home sets the mood for the entire house. If you have carpeting that is worn, dirty, and beyond repair, it can bring the entire vibe in the home down, not to mention the value. New flooring is allowable charge in the streamline program, enabling you to change flooring in any room, whether you change from carpeting to hardwood, laminate to hardwood, or carpeting to carpeting – the type does not matter as long as you are enhancing the value of the home.

Accessibility Changes

It can be difficult to find a home that is accessible along with meets your cosmetic needs. Accessibility changes are an allowed charge in the 203K program. The changes cannot be structural, but there are many ways that contractors can make homes more accessible for wheelchairs and/or walkers without making structural changes.

New Windows

The windows on your home provide a variety of benefits. They are obviously a part of your curb appeal because ugly windows can really be an eyesore. But they are also a major component of the energy efficiency of the home. Without proper windows, the home can have drafts and suck up energy by using the furnace and AC unit excessively. New windows or even window repairs are included in the streamline 203K program, which can have a dramatic impact on your home.

Repair or Replace Utilities

The furnace, AC unit and plumbing all play a major role in the function of your home. Without an efficient AC unit or furnace, your home could be uncomfortable and your bills high. Part of the 203K program enables you to repair or replace these items in order to make them more efficient and reliable for your home.

Removing Mold or Repairing Termite Damage

When you purchase a new home, the inspector will look for mold and/or termites. If either is found, it can be a deal breaker for any other type of mortgage as the home does not meet code. The streamline 203K program, however, allows these issues as long as mold abatement and/or termite damage repair is included in the repairs to be done on the home.

Energy Efficient Changes

Supplying the funds for energy efficient changes enables you to save money in the long run, allowing you to have more money to get your mortgage payments made each month. This is an incentive for the lender to provide you with funding for these changes under the 203K program, including the installation of solar energy panels, which also helps to defray the wear and tear that takes place on the utilities in the house as they will be used less with energy efficient changes in the home.

Adding Decks, Patios, and Porches

Adding decks, patios, or porches might not seem like an essential change to a home, but they provide more curb appeal and room for entertaining outdoors, which can help to enhance the value of the home. You can repair, replace, or add any of these items to your home under the streamline 203K program.

Appliance Upgrades

Appliances that are old and worn down do not work as efficiently as new appliances, which makes them a great investment for your new home. You can wrap the costs of the new appliances into your 203K loan, paying for them in your monthly mortgage payment and giving your kitchen a brand new look with this simple change.

Paint

Paint might seem like an odd expense to include in your 203K loan, but it can transform your entire home with just a change in color. If you want to change the entire interior colors or even the exterior siding color, you can do so by including the costs in your 203K loan.

These are just a few of the great changes you can make to your home and include in your first mortgage. As long as the changes are under $35,000, not structural, and do not include landscaping or the addition of a pool in your yard, they may be able to be included into your loan.

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Finding a Contractor

No matter which lender you use, you will not find a list of approved contractors with any lender or even HUD. It is up to you to find the contractor that meets HUD’s requirements, though. HUD does have certain specifications regarding proper licensing, supplying references, holding adequate insurance, and have the experience to perform the jobs successfully. This makes your search for a 203K contractor a little more difficult. As you interview various contractors, one of the most important questions you should ask is in regards to their experience with the 203K process. If they are unfamiliar, it is best to look for a contractor that has experience with it because there are plenty of requirements they need to meet. The actual documents the contractor must provide includes:

Proof of any required licenses for the county and/or state you reside

Proof of all insurance policies, including workmen’s comp in the event that an injury or accident were to happen onsite

References from previous jobs

W-9

Agreement with you regarding the work to be done

The 203K Lender’s Role in Choosing the Contractor

While the lender cannot make you choose a specific contractor, they do have a say in who you choose out of the few you have selected. Typically, it is best to submit several estimates to your lender from various contractors as the lender has the final say in which costs are reasonable and customary as well as acceptable for the loan’s purposes.

The lender will need to know several things including the exact changes that are to be made on the home; how they will be done; what materials will be used; how many subcontractors will be used; and the timeframe in which the job should be completed. Everything that the contractor says/promises must be in writing because the lender has to approve it and it becomes a part of the loan documents when you close on the loan. Everything is contingent upon the contractor’s work including how/when funds are disbursed and when the final inspection can occur.

Who Performs Inspections?

Because you do not need to use a loan consultant with a streamline 203K project, the inspections are up to the lender. The only time this is required, however, is when the job totals more than $15,000. If it is below this threshold, the lender leaves the inspections up to you. They will not disburse the final funds to the contractors until you say that you are happy with the work that was done and that it was done to the specifications of the contract. If the work exceeds $15,000 and is below $35,000, the lender must perform their own inspection before they release the final funds.

The best thing to do is consult with other people in your area that have done a streamline 203K project to see which contractors they used. Contractors that are used to the process will do a more efficient job and will not balk at the amount of work they must do in order to gain the approval for the lender. When you select your contractor and the lender approves him, you can get the process gong, including closing on the loan and getting the work done!