192016Jul
What is 203k HUD Program which Can Be a Used for Home Renovations

What is 203k HUD Program which Can Be a Used for Home Renovations

Pine Tree Construction (PTC) is a family-owned and operated business for over 30 years in Utah and California. Our business is built upon honesty, integrity, and high-quality performance.

For more than 30 years, PTC has helped owners bring their building dreams into reality. We not only deliver superior construction quality, but we put our clients first with valued engineering ideas to save money and time. Throughout our 30 years of operation, we have always had one goal in mind, Customer Satisfaction.

We are a member of Better Business Bureau. Additionally, we are a certified contractor for 203(K) HUD program.

PTC has taken the time to build a solid foundation of expertise and knowledge that offers our clients a systematic and ground-up approach for any type and size of projects.

We are proud to offer financing to help our customers bring their dreams into reality by choosing a program that will meet their needs. We also accept credit cards and PayPal. By using these products; we can build your commercial project, your first home, build your
retirement nest, finish your basement, add a new bedroom and bathroom, or do an addition to help you with your growing family and many other renovations.

Building on a rich legacy of excellence and integrity, PTC will make your dreams and concepts a reality in a timely manner and affordably with outstanding customer satisfaction through each phase of building project.

Section 203(k) insurance enables home buyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.

Section 203(k) fills a unique and important need for home buyers. When buying a house that needs repair or modernization, homebuyers usually have to follow a complicated and costly process. The interim acquisition and improvement loans often have relatively high interest rates, short repayment terms and a balloon payment. However, Section 203(k) offers a solution that helps both borrowers and lenders, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money. They also protect the lender by allowing them to have the loan insured even before the condition and value of the property may offer adequate security.

For less extensive repairs/improvements, see Limited 203(k). For housing rehabilitation activities that do not also require buying or refinancing the property, borrowers may also consider HUD’s Title I Property Improvement Loan program.

Section 203(k) insures mortgages covering the purchase or refinancing and rehabilitation of a home that is at least a year old. A portion of the loan proceeds is used to pay the seller, or, if a refinance, to pay off the existing mortgage, and the remaining funds are placed in an escrow account and released as rehabilitation is completed. The cost of the rehabilitation must be at least $5,000, but the total value of the property must still fall within the FHA mortgage limit for the area. The value of the property is determined by either (1) the value of the property before rehabilitation plus the cost of rehabilitation, or (2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.

Many of the rules and restrictions that make FHA’s basic single family mortgage insurance product (Section 203(b)) relatively convenient for lower income borrowers apply here. But lenders may charge some additional fees, such as a supplemental origination fee, fees to cover the preparation of architectural documents and review of the rehabilitation plan, and a higher appraisal fee.

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k) insured loans can finance the rehabilitation of the residential portion of a property that also has non-residential uses; they can also cover the conversion of a property of any size to a one- to four- unit structure. The types of improvements that borrowers may make using Section 203(k) financing include:

structural alterations and reconstruction
modernization and improvements to the home’s function
elimination of health and safety hazards
changes that improve appearance and eliminate obsolescence
reconditioning or replacing plumbing; installing a well and/or septic system
adding or replacing roofing, gutters, and downspouts
adding or replacing floors and/or floor treatments
major landscape work and site improvements
enhancing accessibility for a disabled person
making energy conservation improvements
HUD requires that properties financed under this program meet certain basic energy efficiency
and structural standards.