Sacramento FHA 203k Renovation/Rehab Loan





Renovation / Rehab Loan – FHA 203k streamlined explained

There are two programs to discuss here.  The full 203k and the 203k streamlined.  The 203k is your major renovation loan where your repairs will be in excess of $35,000 and/or an engineer is required.  Since the streamlined product is the more popular one, below you can find details about the program. 


203k STREAMLINE

  • Used for minor cosmetic work
  • Should ideally be used for no more than 3 jobs total
  • No consultant / engineer / architect required
  • Property cannot be vacant for more than 30 days.
  • Work must be completed within six months.
  • Work must be professional.
  • If job requires a permit, borrowers must get a permit and a sign-off.
  • Work must commence within 30 days from closing.

Eligible Repairs & Improvements

  • Roofs, gutters and downspouts
  • HVAC systems (heating, venting and air conditioning)
  • Plumbing and electrical
  • Minor kitchen and bath remodels
  • Flooring: carpet, tile, wood, etc.
  • Interior and exterior painting
  • New windows and doors
  • Weather stripping & insulation
  • Improvements for persons with disabilities
  • Energy efficient improvements
  • Stabilizing or removing lead-based paint
  • Decks, patios, porches
  • Basement completion and waterproofing
  • Septic or well systems
  • Purchase of new kitchen appliances or washer / dryer

Repairs Not Permitted

  • Landscaping or yard work
  • Major remodeling
  • Moving a load-bearing wall
  • Room additions or add-ons to the home
  • Fixing structural damage

Disbursement of Payments

  • Maximum of two payments to each contractor, including the borrower, providing the borrower works under a "self help" plan.
  • No more than a 50% advance is allowed.
  • Do-it-yourself allowances do not include labor; only materials costs are allowed.
  • Final payment is paid after submission of evidence of payment to sub-contractors / suppliers or other possible lien claimants.