What Is An
FHA Rehab Loan
When searching for a rehab loan solution, an FHA rehab loan, also known as a 203k rehab loan, may be the right option for you. Under the Federal Housing Administration (FHA) and the Department of Housing and Urban Development (HUD) approved lenders can offer borrowers the ability to purchase properties in need of rehabilitation.
This type of loan, also known as a 203(k) is different from a traditional mortgage loan because it can include the cost of necessary property repairs within the loan. Normally, when someone wants to purchase a property that needs repair, they must first secure a loan to purchase the property, and then obtain additional financing or funds to pay for the cost of the repairs. This can be difficult, if not impossible. This process usually involves high interest rates, short periods of amortization, and is not a financial possibility for many potential home buyers.
An FHA 203k rehab loan provides a way for home buyers to obtain long-term fixed or adjustable rate mortgages designed to finance the purchase of the property, as well as the cost of any necessary repairs.
How Is The FHA Rehab Loan Amount Calculated?
The amount of the loan, or mortgage is calculated based on the potential projected property value once the repairs are completed, as well as the amount needed to make the repairs. While certain luxury improvements and additions are not considered to be necessary expenses under an FHA 203(k) rehab loan, home owners can use the funds from their 203(k) towards improvements and additions such as painting, roof and structural repair, room additions, decks, and more.
ZINC's Investor Loan programs are similar to a FHA 203-K loan, except ZINC can close investor rehab loans in as little as 10 days, while 203K loans can take up to 4-6 months for an approval. Visit www.zincfinancial.net today or call us at 866-376-7443 to learn more about our Investor Rehab loan programs.