Did you know you can buy a fixer-upper and roll the costs of repairing it right into the mortgage you use for purchase?
With an FHA 203k loan, buying the home of your dreams and fixing it up could not be simpler.
What is an FHA 203k Loan?
An FHA 203k loan is a mortgage that rolls together the purchase and repair costs for a home.
The benefits include:
- Speed. It takes less time to apply for one loan than two.
- Simplicity. You only have one monthly bill to pay.
- Affordability. You have just one loan accruing interest, not two.
So, you can save time and money, making it easier to purchase your ideal home.
How You Can Use an FHA 203k Loan in FL
The intended use for an FHA 203k loan is to turn an unlivable home into one that is liveable. It is not to add luxuries.
Most other types of upgrades and repairs are allowed. For instance:
- Add plumbing, septic, and electrical, if it does not already exist.
- Upgrade, repair, or replace any of the above.
- Construct a garage.
- Remodel a bathroom or kitchen.
- Make the home more energy-efficient.
One easy way of understanding what is and is not permitted with an FHA 203k loan is to consider the example of a swimming pool.
If the property you wish to purchase has a swimming pool already on the premises, and that swimming pool is in need of repair, you can bundle in the cost of doing so.
But if you want a swimming pool, and one does not already exist, it is considered a luxury upgrade. As a result, you may not bundle in the price of installing one into this type of mortgage.
Do You Qualify for an FHA 203k Loan?
To be eligible for this type of home loan, you need to meet these requirements:
- Your credit score needs to be in the range of 620 to 640 or above.
- You must have a debt-to-income (DTI) ratio no higher than 45%.
- You need to be able to afford a down payment.
- You must be purchasing a property that is eligible. Cooperative units and investment properties are not allowed.
Apply Now for an FHA 203k Loan
If you are ready to buy and fix up your dream home in West Palm Beach, North Palm Beach, or beyond, we can help you apply for an FHA 203k loan. Please call (561) 316-6800 to schedule your consultation.