As more and more bank owned properties are bought here in Arizona, many people are starting to become aware of the various loan programs designed for homes that are in need of repair. The most popular ones are the FHA 203k Streamline, the FHA 203k loan and the Fannie Mae HomePath loan programs.
When it comes to the two FHA loan options, many people ask me “why would someone want an FHA 203k Streamline loan vs. a FHA 203k “regular” loan? And the simple answer that I give is this: if the cost of repairs is anywhere close to the $35,000 allowed by FHA for the FHA 203k streamline program, go with the streamline.
If it is much, much more than that – you will need to pick the “regular” FHA 203k loan program.
But the answer is really slightly more in-depth than that — and here are just a few other reasons people choose the FHA 203k streamline loan program:
- Architectural exhibits are not required with the FHA 203k streamline
- The lender is responsible for making sure the cost to repair is reasonable
- General contractors and/or consultants are not required
- Some lenders don’t require that you get at least $5,000 in repairs (some do)
Now there are certain situations where it is clear that you are going to need far more than $35,000 to rehab a house – but I have found that in most cases, the $35,000 for repairs is more than enough – which makes choosing the FHA 203k streamline an easy choice.