We are now proud to offer the Full FHA 203K Program!

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I am pleased to announce that Fairway Independent Mortgage has expanded our product line – we now offer the Full FHA 203K program!  The addition of this product to our comprehensive list of construction financing options will provide additional flexibility for our buyers.  Our Bloomington Branch has seasoned professionals, all well versed in construction lending.

Construction financing can take many forms.  Many of our clients are building a new home on a vacant lot, tearing down an existing structure to build a new home, or doing a complete remodel of their primary residence.  These projects are best done with our conventional Construction to Permanent financing options.  Most of these projects would fall outside the scope that the FHA programs allow, limited by the maximum allowable mortgage amount in our area of $318,550.  But what about those projects that will work perfectly with the FHA suite of products?  Below are some reasons why FHA could be the product of choice.

The FHA Streamline 203K product allows for non-structural repairs to a home being purchased.  It puts a $35,000 cap on the work that can be done. That amount will be inclusive of a contingency reserve and some minor administrative fees for the program.  Normal items that we see under this program are updates to kitchens, bathrooms, flooring and mechanicals; energy efficiency items such as windows and furnaces; along with deferred maintenance items such as painting, siding, and roofing.  The needs list of items must all stay within the program guidelines.  The work being completed cannot keep the homeowner from occupying the property within 30 days of closing, and the project cannot exceed six months in duration.  Normally, these Streamline 203K projects are all wrapped up in under ninety days.

The Full FHA 203K product goes much deeper in scope.  This product allows for structural and non-structural repairs greater than $5,000.  The upper limit for the program is the FHA loan limit, which is $318,550 in our 11 county Metro Area.  The program removes the restrictions of the streamline product to allow for major renovations.  Walls can be moved or removed.  If you are lucky enough to buy a home with a pool, but it needs some minor repairs, they are allowed under the Full 203K.  Even landscaping and repairs for a detached garage can be done. This program is done under the watchful eye of a HUD Consultant, and up to five draws are allowed. The project must be complete within 6 months.

Which product is best for the homeowner?  Let us help with that!  With our experience, we can filter through all the available program guidelines.  We look at the condition and price of the property selected, along with the wish list of repairs to be done.  We know the project wish list does not always equate to value, so we carefully match the borrower’s capacity to the scope of the project.  We take great care in helping borrowers make wise choices so they can purchase the house and make it the home of their dreams!     – Randy Cullen

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