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Streamline 203K FHA Loans - The Basics Part 1 can be found here.

Streamline 203K loans can be used to finance many different types of repairs and improvements. Many originators are surprised by some of the repairs that are eligible to be financed.

Here is the list of eligible repairs and upgrades:

  • Repair/Replacement of roofs, gutters and downspouts
  • Repair/Replacement/upgrade of existing HVAC systems
  • Repair/Replacement/upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.
  • 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
  • Repair/replace/add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement

Here is the list of improvements which are ineligible for financing with a streamline 203k loan:

  • Major rehabilitation or major remodeling, such as the relocation of a loadbearing wall
  • New construction (including room additions)
  • Repair of structural damage
  • Repairs requiring detailed drawings or architectural exhibits
  • Landscaping or similar site amenity improvements
  • Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) payments per specialized contractor. That would necessitate a “consultant” to develop a “Specification of Repairs/Work Write-Up”
  • Improvements which require plans or architectural exhibits
  • Improvements which require a plan reviewer
  • Improvements which result in work not starting within 30 days after loan closing; or cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after mortgage loan closing)

When borrowers need repairs or improvements from this second list, a regular FHA 203K loan would be required.

In the next segment we will cover how the FHA Streamline 203K process works.


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Filed under: FHA 203k

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