FHA 203K loans may be used to do minor remodeling and non-structural repairs on your primary residence. Bluecastle Lending does Limited 203 (k) loans. Below are some highlights:
- Minor remodeling and non-structural repairs only
- Minimum $5,000 repair amount and maximum $35,000 including all costs
- A 203(k) fee consultant is not required but may be used
- Repairs must start within 30 days and be completed within 6 months
- Maximum of 2 draws (Initial and Final)
- Projects cannot have more than three (3) specialized contractors without the use of a General Contractor to manage the project
- Painting and appliance purchases may be included as self-help
Limited 203 (k) Eligible Repairs and Improvements
- Eliminating health and safety hazards to meet HUD’s minimum property requirements (MPRs)
- Repair/replacement of roof provided the structural integrity of the structure will not be impacted by the work being performed; siding; gutters and downspouts
- Repair/replacement/upgrade of existing: HVAC systems, plumbing, and electrical systems
- Repair/replace/add exterior decks, patios, porches (must increase As-Is Property Value equal to the dollar amount spent on the improvement)
- Minor remodeling, such as kitchens, which does not involve structural repairs
- Painting, exterior and interior (changes for improved functions and modernization)
- Eliminating obsolescence
- Purchase and installation of appliances including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
- Accessibility improvements for persons with disabilities
- Lead-based paint stabilization or abatement of lead-based paint hazards if the structure was built before 1978
- Septic system and/or well repair or replacement
- Connecting to public water and sewage systems
- Pool repairs
- Installing/repairing fences, walkways and driveways
- Check HUD’s website for a complete list of allowable repairs; www.hud.gov
Note: All repairs/improvements must meet HUD’s minimum property requirements and meet or exceed local building codes.
Limited 203 (k) Ineligible Repairs and Improvements
Major rehabilitation/remodeling, such as when any of the following exists:
- Repairs/improvements requiring a work schedule longer than six months to complete
- Rehab activities require more than 2 payments per specialized contractor
- The required repairs arising from the appraisal requiring a HUD Consultant to develop a specification of repairs/Work Write-Up or requiring architectural exhibits/plans
- The repair prevents the borrower from occupying subject property for more than 15 days Major remodeling and structural repairs/alterations such as 1-4 structure conversion, additions, finished attics, basements, constructing a garage, changing footprint or requiring architectural plans, etc.
- Site improvements and landscaping
- Constructing a windstorm shelter
- Additions/alterations to support commercial use or to equip/refurbish space for commercial use
- Recreational or luxury improvements such as –
o Swimming pools
o Exterior hot tub, spa, whirlpool bath or sauna
o Barbecue pits, outdoor fireplaces or hearths
o Bath houses, tennis courts, satellite dishes, photo murals, gazebos,
o Tree surgery (except when eliminating an endangerment to existing improvements)