FHA 203K Loans in NC

FHA 203K loans are perfect for those of us who fall in love with a great house that has this Gosh Awful Shag Carpet!  This carpet would give you a headache!  How can you buy the house if you don’t have an extra $5000 to update that 1970’s carpet, green countertops, and linoleum?

If the property is under the FHA loan limit in your county, you can purchase it with a FHA 203K loan.

Let’s say you negotiate a sales price of $100,000.  With a traditional FHA mortgage loan, you would need to put 3.5% of the $100,000 into the down payment.

With this special FHA 203k Renovation mortgage program, designed for REHABS, you can add up to $35,000 for “updates.”  This means that if you negotiate a price of $100,000 and you need an additional $5000 for the updates…  we base the 3.5% down payment on $105,000!

It’s a GREAT program for folks who need to update a property!  The main things to remember about the FHA 203K loans in NC are:

• You can add a minimum of $1000 to the purchase price for improvements, including appliances.
• You can not change the “footprint” of the house.
• You can not borrow more than $35,000 for improvements.
• The property must appraise for the improvements plus the purchase price, or “after improvement” value.
• Qualifying is the same as with traditional FHA loans, so you need to have at least 2 credit scores above 660.
• The after improvement value can not exceed the maximum loan amount for your county.
• The checks for improvement will be going directly to the entity doing the work, only in RARE occassions will this be the homebuyer.
• Great loans for folks purchasing foreclosed property!
• FHA is not a loan for Investors, with the exception of those purchasing a HUD foreclosed property – when HUD allows an FHA mortgage as part of the contract.

Ineligible Improvements/Work for FHA 203K loans in NC

• Major rehabilitation or major remodeling, such as the relocation of a wall
• New construction (including room additions)
• Repair of structural damage
• Repairs requiring detailed drawings, plans or architectural exhibits
• Landscaping or similar site amenity improvements, including fence
• Lead-based paint stabilization or abatement of lead-based paint hazards
• Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) draws/payments.
• Any work requiring a plan reviewer
• Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the mortgage closing.

If you have questions about a FHA 203K loans in NC, please contact Steve and Eleanor Thorne   919-649-5058. Connect With Us on Facebook or on Google Plus!