Financial Resource

Florida FHA 203k- Florida Rehabilitation Loans

The Federal Housing Administration (FHA), under Section 203k, will insure Florida FHA loans that include rehabilitation (rehab loans) and repair costs in the amount borrowed from an independent Florida mortgage lender. FHA does not lend money, but they insure private Florida mortgage loans based on their specific underwriting guidelines.

THE FHA 203K loan is intended for Florida neighborhood and community revitalization, as well as encouraging Florida home ownership.

Florida FHA 203k Rehab Loan Advantages

Another advantage to the Florid as FHA 203k mortgage loan program is that Florida buyers can focus on the location and floor plan instead of the condition of the Florida home. Using a Florida FHA 203k rehab loan, there is less competition for properties which allows for a more aggressive purchase price.

Using and acquiring Florida homes with rehab loans are favorable to bank owned and HUD foreclosed properties because the property is sold “as-is.” More specifically, Florida foreclosure property can be sold in it’s current condition which is appealing to foreclosed seller.

FHA 203k Loan Qualifications

Standard FHA guidelines are used when applying for rehab loans. FHA’s credit underwriting guidelines are flexible and are advantageous for investor’s or first time Florida home buyers looking to get a good deal on a property. Florida  Lenders are also qualifying buyers with 100% financing when used with down payment assistance.

On top of all this, FHA’s guidelines allow the Florida seller to pay all closing costs (up to 6%). Florida Banks are able to provide rehab loans with fixed rate or adjustable rate mortgages. In addition, Florida buyers can receive credit aid from non-occupant co-borrowers.

Eligible Florida Properties for FHA 203k Rehab Loans Single family residence (SFR) PUD’s Condo’s Owner Occupied Only (FHA 203k rehab loan) Purchase Refinance Florida FHA 203k Rehab Loan Process

After the seller accepts the buyers offer, the borrower chooses a licensed and bonded general contractor. The FHA approved consultant is then chosen by your http://www.fhamortgageprograms.com/florida/ consultant. The rehab loan borrower, general contractor and consultant meet at the property to discuss the repairs needed on the Florida home. The consultant then completes a work write-up of repairs to provide to the buyer, lender and Florida FHA appraiser.

 Allowable Improvements

Major structural repair (fire damage) Kitchen and bath remodel Room additions Landscaping Roofing Flooring Virtually anything except luxury items Florida FHA 203k Rehab Loan Appraisal Process

The FHA appraiser receives the rehab work-write up from the consultant. Then the Florida FHA appraiser completes the appraisal to determine “as completed” value. This is otherwise known as after repair value (ARV). FHA uses 110% of the “as completed” value to calculate the maximum mortgage amount of the rehab loan.

Florida FHA 203K Rehab Loan Terms

Most commonly, the FHA 203k rehab construction needs to be completed within 6 months after the close of escrow. The buyer’s loan payments can be included in the rehab mortgage for up to 6 months (determined by the scope of work and timeline in the write-up). Next, the FHA 203K consultant determines the completion of work and authorizes the final draw (payment) to the contractor. After the final payment, the FHA 203K rehab borrower can now move into their newly renovated home.

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