The FHA 203(k) loan in Arizona enables qualified borrowers to purchase a Phoenix home that may need repairs or to refinance an existing home for the purpose of remodeling. You can borrow monies to purchase the real estate and make the repairs and upgrades with only one set of paperwork and one set of closing costs!
These loans are especially great for FHA properties, older homes and REO homes — but any home can benefit from some remodeling or cosmetic fixes, to make it your own.
With FHA 203(k) rehabilitation lending, you have a convenient alternative to a second mortgage or HELOC for repairs, renovations and improvements. The loan amount is based on the as-completed value of the home, rather than the present value.
The benefits of an FHA 203(k) include:
- Purchase and refinance on 1- to 4-unit primary residences
- One underwriting review and one closing for rehabilitation construction and permanent financing saves you time and money
- Loan based on after-improvement value of the home
- Down payments as low as 3.5%
- Family members may pay all of the borrower’s required down payment, closing costs, prepaid expenses and discount points.
Even if you don’t have a lot of cash at hand, you may still be able to qualify for a 203(k) because of the allowance for family members to contribute funds.
There are two primary types of 203(k) loans: the Streamline Renovation loan and the Standard Renovation loan. Below are details on both:
Streamline Renovation Loan
Program Benefits:
- Total rehabilitation costs up to $35,000
- No HUD Consultation necessary
- No contractor approval necessary
Some examples of allowed renovations are:
- New roof
- Minor remodel of kitchen or bath
- New HVAC
- Upgrade electrical or plumbing systems
- New carpet or paint
- Install hardwood floors
- Purchase of new appliances
- Repair insect or weather damage
- Replace windows
- Finish basement
Standard Renovation Loan
Program Benefits:
- No limit on repair amount; $5,000 minimum
- Inspection fees for up to five draws are included in loan amount
- Single-family homes, PUDs and 2-4 unit primary residences are eligible
- HUD Cost Consultant fee may be rolled into the mortgage
- Mortgage payments for up to six months may be included if the property is not habitable during renovation
Some examples of allowed renovations are:
- New roof
- Remodel kitchen or bath
- Room addition
- Structural alterations or reconstruction
- New HVAC
- Upgrade electrical or plumbing systems
- New carpet or paint
- Improve landscaping
- Install hardwood floors
- Purchase and installation of new appliances
- Repair or replacement of structural damage
- Replace windows
- Finish basement
- Energy conservation improvements
- Major landscape work and site improvement
Use the 203(k) to turn a good home into a great home. We’d love to discuss this program with you in more detail. Please contact us today to learn more about the 203(k) home renovation loan and whether it’s the right choice for you!
There are other things helping the Arizona housing crisis. The time lines for short sales has shortened with most lenders. They have streamlined their processes. One example of this is Fannie Mae was just given more authority by 5 major mortgage insurers to approve a short sale without their approval. Prior to this, the mortgage insurance approval process could add an additional 2-4 week to the timeline. This will really help and shows the intent of institutions and mortgage insurers to want to complete short sales in a more efficient time frame.
This property includes a beautiful diving pool which was recently remodeled to include new plaster and all new pool equipment (including a new efficient variable speed pump) to reduce electric bills. The home is also within walking distance to Arizona State University (ASU West Campus). Other benefits of this home include a new roof as of 2010 and the fact that it is located in a well manicured North Phoenix neighborhood which has no HOA fees.
The kitchen features granite counter tops laying over new cabinets and an undermount sink. The newly added appliances help support the updated feel of this kitchen.
This Chandler property has a backyard that comes with a private pool which has just undergone a new plastering. Because the property has been vegetated with desert landscaping, it should be very low maintenance and easy on the water bill.
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