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What is an FHA 203(k) Loan?
An FHA Rehab Loan, also known as a 203(k) loan, allows homebuyers or homeowners to finance both the purchase (or refinance) and the cost of renovations in one loan. It’s a government-backed program with low down payments and flexible credit requirements, making it easier to buy and upgrade a home in need of repairs.
We can help guide you through the Rehab process.
Answer a few questions to get a personalized offer.
How does it work?
n FHA Rehab Loan works by combining the cost of buying or refinancing a home with the funds needed for renovations into one single loan. Here’s how it works:
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Apply for the Loan: You apply through an FHA-approved lender who will assess your financial situation, including credit score and income.
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Property Evaluation: The property is evaluated to determine the cost of necessary repairs or upgrades.
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Loan Approval: Once approved, the loan amount includes the purchase price (or refinance amount) plus the estimated renovation costs, which are determined by a contractor’s bid.
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Renovation Process: The renovation funds are held in an escrow account and released as work is completed. The contractor completes the repairs, and the funds are paid out in stages.
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Paying the Loan: Once renovations are done, you repay the loan through monthly payments, typically over 15 to 30 years, just like a standard mortgage.
This streamlined approach makes it easier for buyers and homeowners to renovate a home without needing separate financing for repairs.
We can help guide you through the Rehab process.
Answer a few questions to get a personalized offer.