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203k Renovation Jumbo… This is HUGE

“This is HUGE”

Three words by our regional manager got everyone reading the new product memo announcing we would be offering FHA 203k mortgages up to the expanded loan limits effective immediately.  A flurry of activity began almost immediately.

What is a 203k?

203(k) is HUD’s program code for an FHA loan program so well-known for its difficulty and paperwork that many… well… most lenders don’t even offer it.  What is special and unique about it is that it allows a buyer (or homeowner in the case of a refinance) to borrow with one loan the funds needed to purchase a home (or pay off existing loans if refinance) and renovate it.  The loan amount is based on the COMPLETED value of the property AFTER renovations are complete.  It is by all accounts a government  insured construction loan. 

Unlike construction programs offered by many local banks, this transaction is done with one loan with one closing.  Borrowers get low FHA rates with very low 3.5% minimum down payment requirements.   

What makes the announcement by Southern Trust HUGE is that it will offer expanded loan limits under this program.  That pushes the loan amount cap as high as $729,750 in some parts of the country.  Loan limits do vary depending on property location but as an example, a home located in Baltimore County Maryland would be eligible for a loan up to $560,000.  The limit in Frederick County Maryland is $729,750.  Call or email me for specific information in your neck of the woods.

FHA Good Neighbor Next Door

Even more exciting… is the combined use of this program in conjunction with FHA’s Good Neighbor Next Door program.  This program allows Police Officers, Firefighters, EMTs and Teachers to buy HUD owned property at a substantial 50% discount off the list price.  Eligible property listings are available on the HUD Homes site.   Use the link above to access HUD’s main GNND program page for more details on how the program works.

Opportunity is knocking, are you listening?

With the tremendous number of bank owned, foreclosed and distress sale property on the market needing renovation work, this is opportunity knocking as loud as it can.  Even if you don’t qualify for or can’t find a home in your area under the good neighbor 50% off program.  Homes that need renovation are typically offered at substantial discounts from market prices. Renovation financing like this will help turn a handyman special into your dream home.

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