+2 votes
asked May 12 in FHA Loans by Debra

3 Answers

+1 vote
Yes, you can qualify for a 203K loan even if you already own a home. Do you have a mortgage on your current home? If so is it an FHA loan? To us the 203K loan, you will need to occupy the home you buy. Meaning it cannot be a second home or and investment property. Please reach out to me, Mike Gracz from the Gustan Cho Associates for more details. I am an expert in renovation mortgage lending! You can reach me on 630-659-7644 or email me at mgracz@usa-mortgage.com.
answered May 14 by MikeGracz (16,780 points)
0 votes
FHA 203k Loans are for both purchase and refinance transactions. The answer to your question is yes, you can qualify for FHA 203k Renovation Loans on an existing home. The new FHA 203k Loan will pay off your outstanding mortgage. A new mortgage with construction budget will be placed. Once your renovations are complete the FHA 203k Loan converts to a 30 year fixed rate FHA term loan
answered May 17 by GustanCho (106,540 points)
0 votes
The FHA 203(k) rehab loan can be used to purchase and fix up a home, or you can refinance with it, adding the costs of your renovations. The advantage of the 203(k) loan is that the maximum loan amount is based on the improved value of the home, not its current value. It's kind of like a home equity loan without the home equity. Keep in mind that all FHA home loans require mortgage insurance (upfront premiums plus monthly charges), and those never go away no matter how much home equity you acquire. Here's an article about FHA 203(k) loans that provides all the details -- what improvements qualify, how to determine your loan amount, and what it costs. https://themortgagereports.com/14946/fha-203k-loan-mortgage-lender-rates

Understand that this is not your only home renovation option, and might not be the best. Fannie Mae's Homestyle mortgage also bases the loan amount on the improved property value, and can be used for investment and vacation homes, unlike FHA. It's also almost always less expensive.

https://themortgagereports.com/21895/fannie-mae-homestyle-vs-fha-203k-renovation-loan

Finally, if you like your current home loan, and have some equity, a home equity loan or line of credit might be a much less expensive way to fund home improvements. Thank you for writing, and good luck with your projects.
answered Oct 24 by GinaPogol (43,100 points)
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