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FHA 203K Streamline Loan
The FHA 203K Streamline loan is a 1st mortgage which combines the purchase or refinance loan with the renovation costs. The 203K Streamline loan is designed for rehabilitation or home improvement projects that are limited or uncomplicated repairs.
If your project includes new construction (room additions), repairs of structural damage, repairs that require detailed drawings or the repairs exceed $35,000, those projects will require the use of the Full 203K Home Improvement Loan.
Eligible properties include 1-4 unit residential properties, condos, manufactured homes and mixed use properties. This product can not be used to complete new construction. Newer construction must be occupied for a minimum of 12 months before this loan can be utilitzed to make any repairs.
The maximum repair amount for the FHA 203K Streamline loan is $35,000, with a minimum of $5000 in repairs. If you aiming to use the Streamline loan product, actual estimated cost of repairs should not exceed about $29,000. The $35,000 must include the cost of repairs, 10-15% for a contingency reserve, costs for inspections, title updates and a supplemental origination charge.
The FHA 203K Streamline loan should not be looked at as an opportunity to get funds for do-it-yourself projects. HUD requires that each portion of the rehabilitation work be done by someone trained in that area of expertise and/or licensed to do the work. If, for example, you work or have worked as an electrician, you may be allowed to do your own electrical work. However, you would not be able to pay yourself for the labor.
Typically the FHA 203K streamline loan does not require a 203K consultant to oversee the project. However, most lenders do require a 203K consultant to oversee the project if the loan involves the purchase of a bank owned property (REO).
The lender will require repairs for any Section 1 pest work and any other Health and Human Safety issues. The FHA 203K steamline will facilitate uncomplicated rehabilitation projects such as:
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Repair/replace roofs, gutters and downspouts.
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Repair/replace/upgrade existing HVAC systems.
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Repair/replace/upgrade plumbing and electrical systems.
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Repair/replace flooring.
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Minor remodeling such as kitchens; cannot involve structural repairs.
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Painting, both exterior and interior.
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Weatherization, including storm windows, doors, insulation, weather stripping.
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Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens.
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Accessibility improvements for persons with disabilities.
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Lead-based paint stabilization or abatement of hazards.
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Repair/replace/add exterior decks, patios, porches.
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Basement finishing and remodeling; cannot involve structural repairs.
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Basement waterproofing.
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Window and door replacements and exterior wall re-siding.
- Septic System and/or well repair or replacement.
The FHA 203K Streamline loan consists of two draws. Typically the first half of the renovation funds are disbursed at loan closing and the second draw is made when the work has been completed.
If you have additional questions or would like to receive our FREE 203K Step-by-Step Guide, please complete the Got a Question? form below.
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