The FHA 203k Loan will allow you to get yourself a single mortgage loan which will pay both for the purchase of a specific piece of property in and around Boston, as well as the costs of renovations to the property after purchase.
This loan from your lender and the FHA is available either as a new home loan or a refinance.
Types of the FHA 203k Mortgage Loan
The 203k loan, depending on the amount of money necessary and the complexity of the renovations or repairs included in the refi, is classified into two types:
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1. Streamlined: If the total cost of renovations of your home will not surpass $35,000 then the streamlined 203k is the loan you need to apply for. Additionally this loan is designed only for projects which will not need the use of an architect or engineer. Because of this, the streamlined option is for those who are looking to make improvements which are less extensive in nature i.e. those which normally do not involve any structural changes, changes which will prevent you from staying inside the house while the repairs are being made for long periods of time.
2. Standard: If you need financing for projects which are complicated and require changes to the basic house structure itself – i.e. you plan on adding another room to your house, then you should apply for the standard 203k mortgage loan. Additionally, if your renovation plan requires the use of an engineer or architect, this is the 203k you should select.Since the nature of the repairs or renovations is complicated, the amount of money which you can obtain via this loan is higher.
Both of the above loans have been created with different types of borrowers in mind. While the streamlined is easy and simpler, and will cost lesser than the standard 203k, it will allow you to borrow only up to $35,000 i.e. it was made for people who are simply planning on making simple renovations to the house. Similarly the standard 203k while more complicated, will allow you access to greater funds.
At the end of the day, you must clearly know what renovations or repairs you plan on doing, before deciding which loan you need to apply for. So when you start the process of applying for a 203k loan in Greater Boston is to contact a 203k loan specialist and your preferred lender. Explain the repairs and renovations you plan on getting done, and your loan officer will be able to logically and rationally look at your application to help you find out which of the two FHA 203k loans suits your needs the best.