A 203K loan is a great option
to have your future home mortgage funded and your repairs made all at the same time. However, as a home buyer you need to be aware of a few repairs that you will be required to have done, possibly in addition to what you are requesting to have done. The reason being is simple; the bank wants you to have this investment but they want to make certain this investment is protected as well.
Let’s begin with the standards
that are set forth in regards to energy efficiency. HUD requires all homes under this 203K loan program to meet some sort of governmental standards. Such as weather stripping must not be worn or old, any cracks on the outside must be sealed and caulked. Little things that a potential homeowner may look over, HUD looks into.
Insulation can be a tricky one. If drywall is removed from an existing wall then before it is replaced insulation must be installed. However, walls do not need to be removed solely for the purpose of installing insulation. Along with this making certain the attic and any crawl spaces are properly ventilated and insulated is a must for the HUD guidelines.
Now HVAC codes are a little trickier, and must be followed to an exact science, or there could be issues. An HVAC system cannot be replaced for one any more than 15% larger than the house actually needs. Now, the only exception with this is if the manufacturer absolutely does not have one that particular size. Also, any return pipes or supplies need to of course be insulate to allow for easier heating and cooling of the home.
Next, let’s cover the safety repairs
that are required on each and every 203K loan. Luckily, there are not a ton of exact safety renovations that are required, but there a few that must be upheld in order to have a successful and flawless loan process. In every 203K loan the first $5,000 must be used for any and all -major structural issues. Some of the repairs that are considered under this category are: exact damage, termites, new HVAC, any repairs to make home handicap accessible, install of a well or septic system, and fixing of the roof or floor.
Once these major items are covered then you can move on to my favorite part: your wish list! Lastly, let’s go over that. Wish list items are easy to explain and fast to fill up that request form. These could be paint, trim, an indented bookshelf, modifications to suit your wants not your needs. One thing to keep in mind with wish list items is not to go overboard. Remember that the bank wants the home in re-sellable condition in case the loan is defaulted on. Any over the top repairs may very well be declined.
Once you have been approved
please feel free to make Truly Noble Services, Inc. your contractor by choice. Contact the office and make certain all paperwork is turned in and completed. Once that has happened, we will be happy to get you on the docket and get that ‘house’ turned into your ‘home’ in no time!
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