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What is a 203K renovation? How does it work?
A 203k Renovation is a federal financing option when purchasing and/or refinancing a home that requires work, upgrade or simply to make habitable. With the most recent foreclosure hikes, many homes have been sitting empty and or have been vandalized over the past 5+ years. In some cases extensive work may be needed to bring the home to code and prepare for habitability. In this case, we would recommend a fully documented 203k loan. Part of the process requires a good relationship with a trusted lender and or mortgage broker (we have contacts with both), a HUD consultant to document, report and inspect the progress of the work proposed and its completion, and of course the Contractor. An experienced contractor would be able to work with the HUD consultant and the mortgage institution for the timely completion of the project.
Some projects do not require extensive work but simply cosmetics, in this case the renovation funds can be up to 35k with a 203k streamline loan. Similar process as above but less document intensive.