203K Streamline. A Rehab Loan that will work for you!
How often have you come to a property and you thought it was a great deal but you were scared away by the amount of rehab it needed? This is not an uncommon situation in today’s real estate market. We find kitchens missing, walls torn up in an attempt to steal the copper, air conditioning units missing, etc. So why would you buy a house like this vs. one that is in good or even fair condition?
These types of homes are typically priced to sell but they need rehab. Traditionally an investor or possibly the end user, has had to draw upon additional resources to get the house fixed up and ready to be moved into. In an economic climate where most people are in a money crunch to begin with, the idea of using even more money on a property can sound scary.
This is where a loan such as the 203k streamline comes into play. This loan allows the buyer (primary resident) to include the money needed to fix up the property as part of the loan amount. The buyer is allowed up to $35,000 in repairs as long as it does not exceed 50% of the total loan amount. The minimum required is $5000 but the greatest part is it can all be cosmetic. In addition, this type of loan typically only requires 3.5% down and it can be gifted. No seasoning requirements.
There is another type of loan called the Home Style Loan. It is very similar to the 203k streamline but it is meant for investors. It requires a much larger down payment but it allows the rehab money be included in the loan similar to the 203k streamline. It is a conventional loan and is great for the investor who has limited cash to be putting into any single property.
There are stipulations to both of these loan types and you should consult for loan advisor before moving forward.
