Properties that require the following work items are not eligible for financing under the Streamline 203(k) Program:
· New construction (including room additions);
· Repairs requiring detailed drawings or architectural exhibits;
· Any repair or improvement requiring a work schedule longer than six (6) months; or
· Necessitate a "consultant" to develop a "Specification of Repairs/Work Write-Up"
Require plans or architectural exhibits;
· Require more than six months to complete (HUD will not grant extensions);
· Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (HUD anticipates that, in a typical case, the mortgagor would be able to occupy the property after mortgage loan closing).
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Those inelegible items would still qualify under the standard 203k program, though, would they not?
It will be interesting to see how the "real world" figures out how to deal with these restrictions. I suspect there will be a lot of applied creativity to remodel a home under this program.
JimG
I have someone that will probably be doing a 203k if the sale gets accepted. I hav never had one before.
There is still the regular 203(k), which even permits a tear-down - as long as the foundation system remains in place. On top of that, the rehab work can take up to six months, with six months of PITI built in to the budget.
Hey Andrew nice post, The 203k full rehab was popular in the 90's and now the Streamline is more advantagous to perspective buyers that want small repairs. It is good for the buyer who wants to update a house and stay under the 34,000 allowed cost for the Streamline 203K.
I'll be teaching a class if your interested on June 04, let me know 3 credit hours.
I believe the 203k is the loan product that is going to revive alot of cities with their REO inventory.