Midwestern Construction is proud to be a well known 203K Approved contractor. We have completed 203K Home Remodel projects ranging from $10K to $150K in repairs and upgrades. Our 203K history speaks for itself and there is a reason when banks need a 203K contractor… they call Midwestern!
What is a FHA 203K Loan?
A HUD FHA program that allows home buyers the ability to revitalize their new home with a full remodel. Upgrades can be any, all or even more than those listed below!
Why is the FHA 203K program better than a regular construction loan?
When a home buyer wants to purchase a house in need of repair or modernization, the home buyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.
Talk to a 203K Lending expert: www.angeladeaton.com