Improving Home Value Through Renovation
The FHA 203k Loan is an excellent way for homeowners in Brevard County, Florida, to finance home repairs, upgrades, and additions. This government-insured loan allows homebuyers to get the financing they need to fix their homes or sell them at a higher price. This could be the right option if you're interested in buying or selling your current home!
Home improvements can most certainly increase the value of your home. Something as seemingly minor as fresh paint or new flooring can make your home more attractive to buyers and, in turn, boost its value.
More significant renovations, like a remodeled kitchen or bathroom, will result in an even more significant increase in value.
Increasing in space
One of the most popular home improvements is adding to your existing home. Building an addition provides more living space for your family, but it also increases the size of your home, which makes it more valuable when you put it on the market.
An extra bedroom or two and an extra bathroom can make an enormous difference in the amount of money someone is willing to pay for your property.
The kitchen is a crucial room for any house as it is typically where families spend a great deal of time preparing and eating meals. If you're looking to add value to your property, consider upgrading the kitchen to make it more spacious and modern. This can be achieved by adding granite countertops and high-end appliances like an oven, range top, or dishwasher.
Another great way to make the kitchen more appealing to buyers is by including a breakfast nook or bar area where people can eat while standing. This gives potential buyers more flexibility when designing their dream kitchens on their properties after purchasing yours!
Bathroom remodeling is a great way to add value to your home without breaking the bank. You can give your bathroom a new look that flows with the rest of your house by simply updating fixtures, adding new tile, or a fresh coat of paint. A well-designed bathroom appeals to potential homebuyers and could help you sell your home faster.
Flooring is a popular home improvement project that can boost the value of your home. If you have carpet or wood floors, you may want to consider replacing them with hardwood or laminate flooring.
Both flooring types are durable and less expensive than other flooring options like tile or slate. Hardwood and laminate flooring require less maintenance than carpeting, so they're easier to keep clean and maintain over time.
What is an FHA 203K loan?
Federal Housing Administration loans help low-income families buy, renovate, and resell homes. The FHA 203k loan is the most popular form of mortgage rehabilitation loan in the United States. While you may be looking for an FHA 203k loan in Florida, this guide may also have some applicable information for residents in other states.
There are many reasons for looking for an FHA 203k loan. Some people are looking to purchase a home that needs some fixing up. Others are looking to buy a distressed home, and they can fix it themselves. Whatever your reason, this guide may help you find an FHA 203k loan that is right for you.
FHA 203K Loan Requirements
The FHA 203K loan program requires an experienced HUD consultant to inspect the property before applying for a 203k loan. This inspection aims to ensure that the home has minimal problems and meets minimum property standards.
If you want to use your contractor, they will need to be able to provide proof of experience, insurance, and licensing information. You'll also need FHA permission before using contractors who don't meet these requirements—so check with them first!
If the contractor does not have enough experience or their work quality is not up to par with industry standards, they cannot be used as part of your project team.
FHA 203k Loan Types - Brevard County, Florida
There are a lot of variations on the FHA 203k loan, but the basic premise is this: home buyers who need repairs to their homes and can't afford them can get a loan to make those repairs. This is possible because of an "appraisal contingency" that allows these loans to be approved before completion.
The appraisal contingency means that you can get your loan even if you haven't finished making all your improvements yet — which is helpful because it takes time for contractors to complete projects!
FHA 203K Standard
The FHA 203(k) loan program allows you to finance the purchase of a home that needs significant repairs or even complete renovation. You can use the loan for structural, non-structural, and cosmetic restorations. It also allows you to obtain a mortgage of up to 6% of your home's value.
The 203K Standard has a minimum improvement cost of $5,000, and the maximum improvement cost is based on the purchase price plus rehab costs, or 110% of the after-repair home value. The amount allowed depends on how much money you will need for the project and how much equity you have in your current home.
A minimum credit score of 580 is required with 3 years of history on all three major credit bureaus (Equifax, Experian & TransUnion).
Uses of a 203K Standard Loan
The FHA 203k loan is a good choice if you want to improve your home. The 203K loan allows you to replace the roof, windows, and doors, add a sprinkler system, or even add an extension to the living room.
The possibilities are endless! You need to consider what you will use the money for if you decide on getting a 203K mortgage. It may seem like a great idea at first, but once everything has been installed in your house, it may not be worth it anymore because there isn't as much space inside with all those new additions.
203K Limited Loan
The 203(k) Limited Loan is a program that allows you to finance repairs and improvements to your home that may not qualify as eligible expenses under a traditional, FHA-insured home loan. This is a good option for those who want to improve their residence or purchase a property to fix it up and sell it for profit.
If you plan on doing non-structural cosmetic work, such as painting, flooring, and tile work, or installing new cabinets or appliances in your Brevard County home, this loan could be right for you!
The maximum budget allowed under this type of financing is $35,000, with lower down payments required than other FHA loans: no equity required! In addition, there is no requirement for HUD consultants during the process, making things much more accessible.
Uses of an FHA 203K limited loans
Replace windows for more energy efficiency - The FHA 203k program allows you to replace your old windows with newer, more energy-efficient ones. This is a great way to reduce your utilities and save money on bills!
Refinish flooring - If you want to replace the floors in your home but don't have enough money for it, an FHA 203k loan may be able to help. A new floor can make all the difference in selling your house!
- Fix the roof - If leaks or cracks in your roof need repair, an FHA 203k loan will allow you to fix them without having to pay out-of-pocket for new materials. This is one of our most popular uses for this type of loan – we see many homeowners fixing their roofs through these programs yearly!
FHA 203K Loan limits - Brevard County, Florida
If you're looking to buy a home in Brevard County, Florida, there are some essential things to know about FHA loan limits. It's important because the amount you can borrow with an FHA loan is based on factors such as how much your mortgage lender determines your house is worth and how much money you agree to make monthly payments on.
The maximum loan amounts for single-family homes are $420,680 for one-unit properties; $538,650 for two-unit houses; $651,050 for three-unit houses; and $809,150 for four-unit dwellings.
FHA 203K PMI - Brevard County, Florida
You may be wondering what PMI is. PMI stands for private mortgage insurance, and it protects the lender from foreclosure if you stop making payments on your home loan.
If you put less than 20% down when purchasing a home, you'll need to pay for PMI, or else the lender will not proceed with the loan. You can have FHA 203k upfront PMI in Brevard County, Florida, of 1.75%.
The monthly FHA 203K PMI in Brevard County, Florida, is 0.45% - 1.05%. The monthly payment will depend on what percentage of the sales price was financed and your down payment amount and loan type (30-year fixed / 15-year fixed).
What can you use an FHA 203K loan for?
With an FHA 203k loan, you can use the money for any home repair or improvement. And, if you're looking to add a room, expand your property, or build a new home in Brevard County, Florida, this program is right for you!
Appliances and fixtures are included in the project cost if you want to remodel your kitchen or bathroom. They may be eligible as well (i.e., granite countertops).
Here's a list of some common uses for an FHA 203k loan:
Home repairs after damage from wind/fire/floods/etc.
Structural repairs, including foundation problems or other major structural issues such as cracked walls and ceilings that need replacing due to age/wear-and-tear (but only if it passes HUD inspections).
- Renovations like installing hardwood floors throughout most of your Brevard County home instead of just one room; adding an extra room onto an existing structure; upgrading windows for better insulation levels, etc.
Steps to apply for an FHA 203K Loan in Brevard County, Florida
You can follow these steps to apply for an FHA 203K Loan:
Check your credit report
It's essential to make sure that you have an accurate credit report before applying for a mortgage, especially if you have been denied in the past. You can get your free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) by going to AnnualCreditReport.com.
The reports are free once a year, but you can request one every four months if you like.
Make sure your credit score is up to par
A good FHA 203k loan will require a minimum FICO score of 6500 or higher. If your score is lower, it may be worth looking into other mortgage options like an FHA streamline refinance or home equity line of credit (HELOC).
Find a real estate agent that specializes in 203k loans
Finding an agent with experience and knowledge of FHA 203k loans is essential to the success of your renovation project.
Your real estate agent will know how much you can borrow, what type of renovations are eligible for this loan program, and what specific requirements must be met during the renovation process. An excellent 203k contractor will also have experience working with agents specializing in this type of loan.
Fill out FHA's pre-approval application online
You can find the online 203k pre-approval form at any time by visiting the U.S Department of Housing and Urban Development's website.
The application only takes about 10 minutes to complete and does not require any supporting documentation at this point in the process.
Get pre-approved for an FHA 203k loan
After applying for pre-approval on HUD's website, your lender will contact you within two business days with more information about your eligibility for a 203k loan.
You should also receive an email from HUD confirming that they received your application and any questions they might have about your request (if there are any).
Hire a qualified contractor
The first step in the process is to hire a qualified contractor to do the work. You can find contractors on sites like HomeAdvisor, Thumbtack, and Yelp. To qualify, they must have at least two years of experience and be licensed in your state.
Get your contractor's paperwork in order
Ensure your contractor has all their paperwork before you sign on with them. This includes business licenses, insurance certificates, and permits from local agencies.
Make sure they have liability insurance that covers both themselves and any subcontractors they work with during the renovation project.
Apply for the final approval with a lender and do walkthroughs
Once you've hired a contractor, it's time for them to apply for final approval with their lender so that construction can begin immediately after closing on your home purchase.
This way, you won't have to wait for months while your home undergoes repairs before moving in or renting out again once it's renovated (which could be costly).
Meet deadlines and submit all documentation to ensure a smooth closing process
Complete your application before the deadline to ensure that all your paperwork is complete and accurate. Once approved for the loan, you'll have 90 days to close on your property.
If you don't close on time, you could lose your new home purchase and be responsible for paying back any money disbursed from your escrow account (unpaid mortgage funds).
Top 5 Desserts in Brevard County, Florida
Some of the best desserts in Brevard are found at local bakeries, diners, and restaurants. Here are five of our favorites:
Banana pudding at the Satellite Beach Diner
The banana pudding is a classic Southern dessert perfect for a warm Florida night. The Satellite Beach Diner serves a creamy version of this treat with vanilla wafers and fresh whipped cream. You can also order it in a cup or as an ice cream float.
Key Lime Pie at Mango Tree in Melbourne
If you want to try one of the most famous desserts in Florida, head over to Mango Tree for some key lime pie. It's made with fresh limes from their garden and has a sweet graham cracker crust that makes it hard to resist!
Apple pie from Woolcott Bakery in Melbourne
Woolcott Bakery is a favorite spot for fresh baked goods — especially their apple pies! Try their peanut butter pie or blackberry cobbler instead if you want something different! They're best eaten warm with a scoop of vanilla ice cream.
Toffee Coffee Crunch Cake from Cafe Margaux in Cocoa Village
The Toffee Coffee Crunch Cake is a must-try dessert at Cafe Margaux. This decadent treat features layers of espresso cake, coffee buttercream, caramel mousse, and crunchy toffee bits. It's the perfect finish to any meal.
Anything from the creme brulee cart at Cafe Margaux in Cocoa Village
Cafe Margaux serves more than just coffee drinks and desserts; it also has one of the best creme brulee carts. Diners can choose from seven flavors of this classic French dessert, including bananas foster, strawberry shortcake, and chocolate hazelnut.
The vanilla bean version is the most popular choice at this cafe and blends French cuisine with a New Orleans vibe.
Now that you know more about the outstanding FHA 203k loan, hopefully, you'll use it to start your remodeling project. Talk to a lender, find out how much money you qualify, and start improving your home