State Street Home Loans is a local leader in the FHA 203K rehabilitation mortgage. Over the years, we have perfected the process of this re-construction financing product. This federally insured loan allows a home buyer to purchase a home with only 3.5% down as well finance 96.5% of the construction costs. This is a “one-time closing”, meaning the homebuyer can lock in a low fixed rate at the time of purchase and maintain that rate throughout the rehab process until the home is paid off. There is no need to modify this mortgage into a permanent loan after the refurbishing is complete.So, the homebuyer saves in closing costs and eliminates the risk of construction loans.
To elaborate further, the FHA 203K eliminates the need for temporary construction financing. Without this financing, the home buyer would need to have much more money down and also fund more of the construction costs themselves. Also, construction financing is normally a variable rate when funded by loans other than this FHA 203K loan.
The FHA 203K is also an excellent option for the Homeowner who wishes to refinance into a lower rate, while borrowing money for major improvements. The homeowner can borrow up to 96.5 % of the “improved value” as opposed to the “current market value”. The “improved value” is the value after all the repairs or additions are made. This enables the homeowner to borrow more money than standard home improvement loans. In some cases, the homeowner will be borrowing much more than the home is currently worth. This loan makes it possible for you to transform your current house into your dream home.
Please call our office, and we will place you with one of our FHA 203K specialists.