FHA 203 K - Limited Repair Program

FHA 203 K - Limited Repair Program

• Term 30yr or 15yr
  
• Eligible properties 1-4 units, manufactured homes & Condo's
  that have been totally completed for at least one year
  
• Cash reserves Yes - 1 month PITI
  
• Contributions 6% of the lesser of the sales price
  
• PLUS cost of rehabilitation or the Appraised value
  
• Assumability Yes - To qualified buyer
  
• Temporary buy downs Not allowed
  
• Consultant Not required
  
• Title Date down required upon Completion
  
• Completion Period Maximum of 6 months
  
• Total Cost Not to excel $35,000

SPECIFICS

• Total cost of Rehabilitation including fees must not exceed $35,000

• Mortgage payments calculated on Sales price plus total cost of rehabilitation

• Must use the services of one or more contractors to complete the repairs

• General contractor is not required

• Borrower must provide a written cost estimate and references from a licensed and bonded contractor for each specialized repair or improvement.

• All cost estimates must include labor and materials sufficient to complete the work by a contractor.

• Architectural exhibits and plan reviewer not required

• Final inspection required for repairs exceeding $15,000

• Receipts or proof of completion from contractor acceptable in lieu of a re-inspection.

• Borrowers must sign a statement before final release of funds that the work has been satisfactorily completed

• No extensions allowed

• No contingency required

• Appraisals- The estimated "as-is" value or the purchase price of the property before rehabilitation, WHICH EVER IS LESS, PLUS the total rehabilitation cost OR 110% of the "as completed- to be" market value. FOR EXAMPLE-

Sales price is 100,000. Borrower wants to redo the Carpet, counter tops and paint the interior/exterior. The bids he gets total 15,000. The new market value that we want to see from the appraiser is $115,000. However he comes in at say.....$107,000. No problem .....

We take his appraisal at $107,000 x 110% = $117,700 we're fine! This is a fabulous benefit on this program - don't you agree?

SELF HELP

• If more than one contractor is used the project will be considered self help. This means that the buyer will be doing some or all of the work themselves.

• Self help borrowers submit a narrative including the following:

Borrowers qualifications for doing the required work

1. 1. When borrower will accomplish work (keeping in mind 6 month renovation period).

   2. How work will be accomplished (if subcontractors will be used), include bids/proposal.

So if a buyer wants to do his own work, he would provide the bids and make a case for his qualifications to do so.

If you would like additonal information please contact me and I an refer you to a lender who can answer any questions you may have.

Jeremy Bray
Windermere/Cornerstone
509-230-5435
www.jeremybray.com
jbray@windermere.com