Do Not dismiss the opportunities today's housing and housing finance markets
have to offer. Housing affordability data, as measure by the Housing Affordability Index 
, is at its highest levels in decades. The homebuyer tax incentives may have expired but there are still energy-efficient
tax credits available . And, interest rates remain at historical lows. When you stop for a moment to consider those facts alone, buying
a home is worth looking into, and many have.
What they're finding is it has become more commonplace that homes available
to the market are less than pristine. This can create an additional dimension of opportunity. However, the opportunity
is often cast aside because the task seems too daunting. The biggest concern being; "how do you buy a home
that needs work?"
One answer is the FHA 203(k). Section 203(k) is HUD's neighborhood and community revitalization
tool, which is insured by the Federal Housing Administration. The 203(k) can be used to purchase and renovate a home,
or refinance and renovate a home you already own as your primary residence.
For more than 30-years the FHA 203(k) Home
Rehabilitation Mortgage Insurance Program has been available. In its early days the 203(k) was a somewhat cumbersome
program. Over the years that barrier was removed through improvements and enhancements.
The most noteworthy enhancement,
which is nothing short of a miracle when Washington's involved, was the addition of the "Streamline K". In
2005, the FHA rehabbed its own rehab program. The "Streamline K" Limited Repair Program helped to eliminate
a few of the costlier barriers that once made the Standard 203(k) impractical when a home required only minor renovations.
Of
course there were numerous refinements to the original program that made it far less frustrating, but the introduction of
Streamline "K" was a game changer because it was a cost effective alternative for minor improvement projects.
Both FHA 203(k) options are a convenient way to modernize, improve, or completely renovate an existing home - the one
you're buying or the one you already own.
Both "K" programs simplify the process by offering a single loan (versus two or more loans) to purchase
or refinance, and "fix-up" a home. And, HUD encourages 203(k) applicants to take advantage of other government
programs, i.e. the Energy Efficient Mortgage (EEM) program, in combination with their rehabilitation program. To do so, exceptions to 203(k) program guidelines
make it possible to combine both programs.
With two Home Rehabilitation Mortgage Insurance Programs - the Standard 203(k)
and the "Streamline K" - HUD/FHA expanded the opportunity to rehab or renovate a home; safely.
If you are
considering renovating a home and looking for options, or you need additional information to help you make that choice; please
contact me. Additional information on the FHA's 203(k) Programs are available here.
