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Renovation Loans can allow you the opportunity to take a home that may be sentimental for you and restore it to its original look with a little extra zest.  They are also great for historic or older neighborhoods that are trendy in your area where maybe a few of your close friends have moved in the area. You find yourself loving the area but the thought of the maintenance and concerns of an older home set you back from grabbing your dream spot. These loans have a lot of opportunities to allow your creative mind to go wild with ideas and create a one of a kind place for the family and yourself. 

The FHA 203K Renovation Loan is a great option for clients who are bargain shopping in a neighborhood and do not mind taking the time to get quotes from general contractors on the renovation process. It is also great for current homeowners who may have an older home and want to do some upgrades as they have equity in the current home and know if they had more square footage or if they upgraded the interior it would increase the value of their home and allow them to enjoy a more custom touch to their place.  The loan usually closes in about 30 to 45 days from start to finish but usually, you will be working with your general contractor to complete the renovation over the next 60 days and a consultant from the lender will check in to make sure the renovations are being completed.

FHA 203K Renovation Loan

  • Streamline: The total cost of the rehabilitation cannot exceed $35,000.
    • The total cost includes Contractor Bid + contingency amount + reinspection fees + permit costs and any other additional costs
    • You have to be willing to put 3.5% of the total loan amount which is the sales prices plus the amount of money for Renovations
  • Standard: This loan can be as much as needed to complete the repairs as long as the total loan amount does not exceed county or parish limits.
    • The limits in Louisiana is approximately 271,000
    • After a bid from a general contractor, you also have to get a bid from a HUD consultant to verify the bid and amount of the cost of renovation
    • The work must begin within 30 days of the execution of the Agreement
    • The work must not cease prior to completion for more than 30 consecutive days
    • The work is to be completed within the time period shown on agreement not to exceed 3 months
    • Usually the escrow will have to have at least 10% reserves and up to 20% depending on the age of home and cost of renovations


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