If upgrades are needed to a home, an FHA renovation loan can help finance that work while helping to keep costs as low as possible. These government-backed loans can be used for purchasing or refinancing, and offer lower down payment requirements and lower refinancing interest rates.
There are two types of FHA 203k loans:
FHA 203k Full/Standard
This option is best for modernizing older properties that need structural repairs or a major renovation. Some examples of updates with a Full/Standard include bedrooms needing to be remodeled, replacement or repairs to plumbing, roofing and floors, or improving function, appearance, landscaping, energy conservation, health, safety and disabled accessibility.
FHA 203k Limited
The Limited loan is designed to handle smaller projects with a quicker turnaround. The cost of renovations can be up to $35,000 and can cover minor changes such as:
- Fixing or replacing roofs, gutters, flooring, decks, patios, windows and other similar options
- Update existing HVAC, plumbing or electrical systems
- Remodel or finish a basement or kitchen that doesn’t require structural work
- Painting and weatherizing
- Improving disabled accessibility
For a more affordable renovation, talk to a PrimeLending loan officer about an FHA 203k renovation loan.