There are two main types of FHA 203(k) loans:
Standard 203(k) Loan: This is for more extensive renovations and repairs, including structural changes and repairs that exceed $35,000. The loan amount is based on the projected value of the property after the renovations.
Limited 203(k) Loan: This is for less extensive renovations and repairs, typically costing less than $35,000. It's often used for cosmetic improvements, such as updating kitchens or bathrooms.
Some key points about FHA 203(k) loans:
They require a down payment of at least 3.5%.
The property being renovated must be a primary residence.
Borrowers must work with an FHA-approved 203(k) consultant.
There are specific eligibility requirements and guidelines for the types of renovations and repairs that can be financed.
Overall, FHA 203(k) loans can be a helpful option for buyers and homeowners looking to finance home improvements, but it's essential to understand the requirements and limitations of the program before applying.
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