Buying a fixer-upper and transforming it into your dream home seems like a grand idea — until you realize that renovations cost a lot of money. Top Flite Financial offers 203K loans which allow you to borrow money using only one loan for both home improvement and purchase.
Backed by the federal government, a 203k loan — also called a rehab loan, supports buyers who want to buy an older home that they plan to renovate. The loan includes an up to 20 percent contingency reserve so that you have the funds to complete the remodel in the event it ends up costing more than estimated.
It can also include a provision that gives you up to about six months of mortgage payments so you can live elsewhere while you’re remodeling, but still pay the mortgage payments on the new home.
The first type of a 203K loan — called regular or standard — includes structural repairs, remodeling, a new garage or landscaping. The second type — called streamlined or limited — includes energy conservation improvements, new roofing, new appliances or non-structural repairs such as painting.
Other repairs that 203K loans cover include:
- Bathroom remodels
- Kitchen remodels
- New siding
- Large additions
- Heating and air conditioning systems
203K loans give you the ability to buy a home in need of repairs that you might not otherwise be able to afford. In addition, low down payment requirements and competitive interest rates make rehab loans a great option.