AAA Home Improvements specializes in accommodating Renovation Loans.

The FHA 203K loan is a type of financing that is insured by the Federal Housing Administration. This allows the home buyer to immediately turn the house they just bought into the house they always wanted by adding or remodeling a bath, creating a custom, designer kitchen, renovate or extend, make repairs and more, all with a single loan at attractive first mortgage rates.

It allows them to obtain both a purchase loan and rehabilitation financing in the same transaction. Before this loan program, a homeowner had to obtain an initial, temporary loan to purchase the home and a separate rehabilitation home loan to make any necessary repairs. Only after the repairs were complete could the homeowner gain permanent financing for their newly improved home.

203K Loans are not only for repairs and renovations, however. They offer a wide-range of benefits to home buyers, while still only requiring a 3.5% down payment for qualified buyers. For instance, they can be used to update or remodel a home, to refinance or to take care of inspection issues, including structural ones. The client could scrape and rebuild a home. They can also be used in conjunction with first time home buyer programs such as CHFA, CHAC, HUD $100 down, and more.

Other benefits of 203K Loans:

• Clients can still close in as little as 30 days, and renovation can begin immediately after closing.
• There are no improvement requirements or repair restrictions. Luxury items such as pools and spas may be included. This gives you the freedom and flexibility to truly make it your home.
• The loan amount is based on the value of your home after the improvements have been made. More money = more improvements = more value.
• The home purchase and improvements are financed simultaneously, so renovation costs are spread out through the entire term of the loan, giving the home buyer lower monthly payments.
• There’s just one application, one set of fees and closing costs and one monthly payment for the loan. This means simplicity and convenience and less hassle.
• Low appraisals can be increased by 10% or more.
• Any money left over once the project is completed is removed from the principal balance of the loan.
• There are two types of FHA 203K Loans:
• 203(k’s) (streamline); and Full 203(k).
  • The full 203k is required for anything requiring structural changes or repairs. It may be used for additions such as new stories, room additions or enlargements, garage additions, etc.
  • The full can be used to completely scrape a house and start over.
  • The streamline 203k has a cap of $35,000 (including all fees). It is designed as a basic “refurbish and rehab” loan for borrowers to finance non-structural and cosmetic only repairs.

Read More at 203kcontractors.com/faqs.