The Streamlined (203k) program is intended to facilitate and help with uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. The total costs of repairs are not to exceed $35,000. This is kind of like a two month construction loan for current FHA customers (refis) and purchases of homes that need a little TLC.
Common examples of uses for the 203K loan are for things like replacing a roof, fixing a bathroom, fixing plumbing, fixing electrical or A/C. The basics of this program are designed for small functional improvements and not neccesarily cosmetic additions to the home. Maybe this is why pools are not covered within the guidelines.
Here is the complete list:
The Streamlined (k) program includes the discretionary improvements and/or repairs shown below:
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
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 a checklist of overstepping the intent of the 203K program.
We cannot help you in these cases
What improvements are INELIGIBLE under the Streamlined (k) program?
Major rehabilitation or major remodeling, such as the relocation of a load-bearing 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;
Any repair or improvements to a pool . (This is hard to believe considering all of the green pools we have these days due to foreclosed and short sale properties)
This is a good program that contractors should keep in mind.
If you approach an FHA customer and they need something fixed, this loan gives the homeower today's new fixed rates and at the same time solves the problem of where to find the financing . There is an appraisal involved with this program and some calculations on the cost of the job and escrowing for contingencies. This program takes into account value, so the FHA customer cannot be more than say 115% Loan to Value ot the loan will not cover everything and they will be writing a check at closing.
We will sit down and prepare the constuction cost worksheet and do the math. Then the cost of the job is figured into the after improvements value of the home.
I support Palm Beach County 203Kwhenever possible!
