Definition: red tape - excessive formality and routine required before official action can be taken.
Red tape is often associated with the federal government. Since the FHA 203k loan program falls under the umbrella of the government, it is also prone to red tape. But there is hope. First, there is the Streamline 203k which has less red tape. Second, the Full/Standard 203k isn't just a red tape program, it has its benefits. Lastly, the team members at AmeriFirst are well-versed in the 203k program, so the red tape shrinks at our appearance!
What's the Difference between the Full 203k and the 203k Streamline?
Yesterday we covered the top 10 repairs covered by the FHA 203k instead of a conventional mortgage. They were basically all covered by the Streamline 203k loan. Today we're looking at the differences between that loan and the Full 203k.
- Structural Repairs. Something as big as jacking up your house to replace the sill plate falls under the Full 203k. So would knocking the house down to rebuild it, as long as you leave the foundation.
- HUD Consultant. The Full 203k requires a HUD consultant on the loan. This person draws up the paperwork and works with you and your contractors to get a write-up before the appraisal. The Streamline 203k does NOT require a HUD consultant (although arming yourself with an experienced consultant is a good idea that can save you money in the long run).
- Cost. The Streamline is $35,000 MAX. If your repairs and renovations go above $35,000 then you need to get into a Full 203k loan.
See the embedded video here - FHA 203k: Full 203k vs Streamline 203k
There are other nuances that differentiate the Full/Standard from the the Streamline. If you have more questions, or want something concrete in your hands, download our free eBook guide loaded with 203k loan information.
One thing to keep in mind: neither 203k option covers luxury items like swimming pools or hot tubs. Sorry!