Are FHA 203k Streamline interest rates higher than “normal” FHA interest rates?
The truth is that it mostly depends on the lender. One of the biggest lenders in the US who did quite a few FHA 203k Streamline loans was Taylor Bean and Whitaker, and when they went under a few weeks ago, now the number of lenders who offer the FHA 203k streamline mortgage is fairly fragmented.
Some of the lenders do charge a slightly higher rate for the FHA 203k streamline loan, but some do not, it is different by lender. And although the most common loan program choice is the FHA fixed rate program, there are lenders who will also offer a FHA adjustable rate with their FHA 203k loan.
One thing that is also somewhat unknown about the FHA 20k3 streamline program with regards to interest rates – because it is a FHA loan program, you can use a 2/1 buydown program do “buy down” the interest rate which will lower your payment for the first 2 years of your mortgage.
FHA 203k Streamline Fees:
The FHA 203k streamline fees also somewhat vary by lender, but generally speaking, you can expect the “normal” FHA fees and something called a “Supplemental Origination Fee” or a “Rehab Admin Fee” which is usually about $350 up to 1.5% of the repair/rehab fee (or a max of about $500). In plain English, this fee is because the FHA 203k streamline loan requires the lender to do more work, so they charge more.
No matter how you add up the fees for the FHA 203k Streamline, it is difficult to say that they are too much different than a “regular” FHA loan – and certainly with the flexibility of getting money for rehab needed on a home, the slight increased fee of the supplemental fee is usually the last thing people worry about with the FHA 203k Streamline program.