Dallas FHA 203K Loan
Renovation Mortgage DFW
Dallas FHA 203K
What is an FHA 203K Full-Renovation Mortgage?
With an FHA 203K Full-Renovation Mortgage, you can receive just one mortgage loan to finance both the purchase of the home as well as the rehabilitation of the property. To provide adequate funding for the renovation and repair of the home, the total mortgage amount is based on the projected value of the property with the work completed. Eligible borrowers are provided with a mortgage amount up to 50 percent of the after-improved value to use on repairs plus the cost to acquire the home.
Can a 203K Mortgage be used to improve a condominium unit?
Yes! A 203K Mortgage can be used to improve a condo; however, condominium rehabilitation must meet the following requirements:
- Only permitted for the owner/occupant and qualified nonprofit borrowers;
- All condo rehabilitation must take place inside of the unit – the complex’s exterior is the responsibility of the condominium association;
- Only 25 percent of the complex’s total number of units is permitted to be renovated at any one time;
- The maximum mortgage amount cannot exceed 100 percent of the after-improved value;
- Each building within the condominium complex can have no more than four individual units within it.
Can investors receive a 203K Mortgage?
No, as of October 1996, investors can no longer receive FHA 203K Full Renovation Mortgages.
Does HUD always require a contingency reserve to cover unexpected cost increases?
Usually, yes. For properties older than 30 years that require over $7,500 in rehabilitation costs, the cost estimate must include a contingency reserve. The contingency reserve must be no less than 10 percent of the cost of rehabilitation, but not to exceed 20 percent. If the utilities were not turned on for inspection, a minimum of 15 percent is mandatory.
Can the Dallas 203K Mortgage amount be increased to cover additional expenses that occur during the rehabilitation period?
Unfortunately the 203K Mortgage amount cannot be increased once the rehabilitation period is underway. Therefore, we highly recommend carefully selecting a contractor who will accurately estimate the cost of improvements as well as adequately complete the improvements at or below the original estimate.
If have any additional questions regarding 203k Full Renovation Mortgages, please contact a Dallas mortgage expert by filling out the form on the right or calling (512) 524-8077.
*Statement based on loan amount of $175,000, 360-month loan term, 4.5% Dallas mortgage rate and 4.5972% Annual Percentage Rate.