FHA 230K Streamline (K)

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Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut NMLS #65149

Most people in the Real Estate Industry know of the FHA 203K program, which was designed to allow Buyers to obtain funds to make major repairs on properties that in a lot of cases are not habitable.  The FHA 203K is a loan that is challenging to do, and anyone looking to do one of these loans would be well advised to go to a Lender that specializes in doing them.  The HUD website contains a list of FHA approved Lenders for each state, and whether or not they do 203K Loans, but there is no assurance that each of these Lenders are proficient at doing them.

We at McCue Mortgage made a decision many years ago that we would not participate in this program, we do not have the time and resource that the full 203K Loan Program requires.  However, we have recently decided to participate in a modified version of the 203K Loan Program, called the Streamline (K), or better know as the FHA 203K Streamline Loan Program.

The 203K Streamline is a much simpler loan to do, that does not require much of the documentation and steps that are required with the full 203K.  Simply put the FHA 203K Streamline allows a Borrower to borrow up to $35,000 or 10% of the IMPROVED value of the property to do needed repairs and upgrades, on 1 to 4 Owner Occupied houses and FHA Approved Condo's, that are in need of a little Tender Loving Care (TLC).  It is very important that you remember this about Condo's, the FHA 203K and 203K Streamline Loan Programs ONLY apply to FHA Approved Condos that are up to 4 continuous units per Condo Building.  There is no limit on the size of the Condo Complex (as long as it is FHA approved) but it will be limited to the buildings within that complex that are NO-LARGER than 4-Units.

OK with that out of the way what are the ADVANTAGES of this program:

  • Available for BOTH Purchase and Refinance Loans.
  • Repairs are completed after the Closing with the funds from the loan.
  • Great for Real Estate Owned Properties (REO's)
  • Downpayment is the same as regular FHA Loans 3.5%
  • Only one loan amount for Purchase/Refinance /Repairs.
  • Loan Fees may be included in the loan.
  • Inspections are not required.

What Repair/Replacement and Upgrades does the FHA 203K Streamline Loan Program ALLOW for:

  • Repair/Replacement of roof's, gutters, and downspouts.
  • Repair/Replacement/upgrade of existing HVAC systems.
  • Repair/Replacement/upgrade of plumbing and electrical systems.
  • Repair/Replacement of existing flooring.
  • Minor remodeling such as kitchens and bathrooms.
  • Exterior & Interior painting.
  • Replacement Windows, Doors and Weather Stripping.
  • Appliances up to $2,000.
  • Repair/Replacement of existing Decks, Patios, Porches.
  • Basement Finishing/Remodeling.
  • Basement Waterproofing.
  • Non-Structural improvements (no additions such as rooms, decks, etc.)
  • Handicap Ramps or other improvements for accessibility for persons with disabilities are acceptable.

I will not go into what the loan application process is for obtaining an FHA 203K Streamline Loan at this time, but I will say this, it is a much simpler and quicker process than the Full 203K Loan Program, and should not be compaired to the Full 203K application process.  If you are interested in reading more about this program you can visit the HUD website for more details.

This is a great program for those properties that might not be selling because they require work, and potential Buyers do not have the funds to do the need repairs and upgrades.  Now they have the means to do so, and this can be a great tool to find more potential Buyers for these properties.

 

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Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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Show All Comments
Rainmaker
591,254
Valerie Osterhoudt
Johnson Real Estate, Inc. - Cromwell, CT
ABR, Cromwell, CT Real Estate ~ 860.883.8889

George.. I'm glad to see McCue stepping up to the plate on this one.   Thanks, too, for breaking it down for me.  I couldn't remember all the advantages of this program.

 

Apr 09, 2009 07:49 PM #1
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Valerie, this Loan Program should make those properties that need some tender loving care a lot easier to sell.

Apr 09, 2009 08:03 PM #2
Rainmaker
1,069,639
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

The 203k streamline loan is awesome!  It allows the buyer to do so much to get a home up to snuf!  I wish you had written this a couple of months ago... fortunately, I found the HUD website, but your explanation was much more clear.

Apr 09, 2009 08:30 PM #3
Rainmaker
292,301
Philip Turner
MCCUE MORTGAGE COMPANY - New London, CT
Mortgage Banker Since 1980

George - Thank you for getting the word out on this very helpful program in a state with lots of older housing stock.  The Streamline version is much easier to work with than the standard 203-K program.  I hope you have lots of success with it.

Apr 09, 2009 09:11 PM #4
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Joan, it has taken me a little while to write about, but I am glad you were able to get some information on it on your own.

Phil, I can't wait to get more activity with this loan product, but I found the restriction that they have on Condo's a little puzzling, since that is not a restriction on the regular FHA Loans.

Apr 09, 2009 09:27 PM #5
Rainer
156,545
Tom Boos
Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI

I have not yet done a 203K deal as yet. After reading your post I will be investigating this type of loan for buyers interested in purchasing homes with "condition issues" to be resolved.  Thanks.

Apr 10, 2009 08:33 AM #6
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George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut - Middletown, CT
Your Connecticut Mortgage Expert

Tom, the process is much simpler than the full 203K, good luck.

Apr 10, 2009 08:48 AM #7
Anonymous
Anonymous
pat
i am doing the stremline k right now. how many points do you usually pay for the program? Is it true that you pay more points becuse the loan is more risk for the lender?
Jun 17, 2009 07:33 AM #8
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George Souto

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