If you prefer purchasing a fixer-upper, the FHA 203k loan is your best option. The FHA 203k allows you to customize your home according to your style and needs, which also increases the value of your home. The flexible terms make it easy for you to qualify.
Read on to learn more about the FHA 203k loan, how it works, and how it increases the value of your home. You'll also discover the best dessert spots in Calhoun County.
What Is an FHA 203k Loan?
The Federal Housing Administration (FHA) insures the rehab loan, making it possible for you to qualify even with poor credit because of the easy requirements. An FHA 203k is a renovation loan you can use to purchase a home that needs repairs. This home loan covers the buying cost and qualifying repairs.
This renovation loan can also cover the cost of temporary housing for up to six months. Temporary housing takes the form of rent when your home is undergoing renovations. You won't need to make separate loan applications to purchase and remodel a home.
Otherwise, the lending institution would reject your separate applications, or the loan may attract high-interest rates under conventional mortgages.
How Does an FHA 203k Loan Work?
The FHA allows you to apply for a 15- or 30-year adjustable-rate or a fixed-rate mortgage from an FHA-approved lender. The final value of your home after the renovations and the project's total cost determines the approved loan amount.
The terms of the loan also depend on the type of FHA 203k loan, which is:
The streamlined loan
You can finance up to $35,000 for any renovation and home improvements, with no minimum amount. This loan finances minor and non-structural rehabilitation projects such as updating appliances, and flooring, replacing the HVAC, minor roof repairs, and painting. The streamlined loan doesn't cover landscaping or new construction.
The standard loan
Standard loan centers around major structural renovations that need a minimum of $5,000 but have no maximum limit. This loan covers significant remodeling, such as pulling down walls and adding more rooms or septic tanks. You must use a HUD-approved professional to supervise the project and ensure that it follows the FHA standards.
FHA 203k Loan Eligibility Requirements in Calhoun County, Florida
The FHA 203k eligibility requirements are similar to the conventional FHA home loan. The following are the qualification criteria for obtaining an FHA 203k loan:
A credit score of at least 620, depending on the lender.
A minimum down payment of 3.5% or more.
A debt-to-income ratio of 43% or less.
The property must be your primary home.
- You must not exceed the FHA's limits of your area.
Specific government agencies and nonprofit organizations are also eligible for the FHA 203k loan but under certain restrictions.
These institutions must put down large down payments of 5%, and the FHA approves the loans through the U.S. Department of Housing and Urban Development (HUD).
Nonprofits can use the proceeds to repair foreclosed properties but not more than ten properties at once.
Additional FHA 203k Loan Information
You can use the FHA 203k loan for the following renovation projects:
Electrical, heating, plumbing, and air conditioning repairs.
Roofing repairs or replacements.
Fix a deteriorated foundation.
Expanding your living space.
- Improving energy conservation.
You can't use the proceeds of the FHA 203k for projects considered a luxury, such as a new pool, building an outdoor fireplace, a tennis court, a gazebo, or installing a satellite dish.
However, most repairs and improvements, such as renovating an existing pool, qualify. The loan includes the renovation project costs like inspections, permits, and fees.
The FHA 203k Loan Process in Calhoun County, Florida
A successful FHA 203k-financed home renovation requires several procedures. Understanding the steps enables you to prepare and know what you need to do.
Your lender will also help you find a suitable home to buy and guide you through the different stages of the loan process. Here is a quick guide to help you get started.
Search for an FHA- approved lender to pre-qualify your loan request. Your lender completes a comprehensive review of your eligibility before approving you for the FHA 203k loan.
They then pre-approve your loan application and provide estimates of the mortgage amount, allowing you to select a home that fits your budget.
Get bids and choose your contractor
Getting the right contractors is as crucial as choosing a suitable FHA 203k loan provider because they're an essential part of the success of your renovation project. Ensure your contractor is licensed and insured.
You can seek the help of your FHA 203k lender to select a good contractor. The contractor is usually paid in phases and only when the project is complete and approved by the HUD consultant.
An assessment of standards and items
Before submitting an offer, tour the house with your contractor and list the items you wish to complete. Then you can decide if it is the ideal house for you.
Your contractor will give you a rough estimate of the cost to finish the job. Submit this bid to your lender with a signed contract, and they will approximate your monthly payment for your FHA 203k loan.
HUD consultant inspections
Under the Streamlined(k) program, a HUD consultant prepares an extensive construction plan, which includes architectural drawings and a cost estimate for the project. The consultant inspects the renovation project before construction.
They then compile a detailed report and recommend changes based on their findings. You must fix these corrections as a loan requirement.
Ordering and reviewing the Appraisal
The underwriter reviews the home to establish the home's future value once the project is completed. The Appraisal ensures that the house complies with the minimum requirements of the FHA.
The appraiser also considers the loan limits and the application documentation to calculate the loan amount that the FHA 203k loan can insure. Following this assessment, your lender offers you a commitment letter and gets ready to close the loan.
Closing the Loan
The closing of the FHA 203k loan requires a renovation loan agreement and an Escrow account. The contract between you and your lender specifies the terms for releasing reconstruction funds. The lender closes the loan, and the FHA requires you to complete the renovation within six months.
How to Increase the Value of Your Home with FHA 203k Loan in Calhoun County, Florida
Finding the perfect home can be challenging, but you can buy an upper-fixer and turn it into your dream home with the FHA 203k loan. Taking out the renovation loan and using it for home improvements is a sure way of boosting the value of your home while making your living space more comfortable and attractive.
But before starting the renovation, ensure that you focus on projects that add value to your home. The following are some home improvements that will boost the value of your living space.
Create More Room or Remodel the Existing One
Expanding the usable space to your current home can be a good investment because its price and value are determined by how many livable square feet they contain, and the larger the space, the better the price. So, adding an extra bedroom or a family room pays off by increasing the value and function of your home.
While creating more space boosts the value of your home, it can be costly. Before designing the extra guest bedroom, you can consider utilizing your current space by combining spaces for a modern and spacious floor plan, or partitioning wasted spaces for an additional room.
Bring a Modern Twist to Your Kitchen
The kitchen is the center of a home, and you can never go wrong repairing your kitchen. Though remodeling your kitchen can be expensive because of the extensive structural repairs. You can recover 50% and 60% of the renovation cost in the long run.
You can still achieve a sleek, modern look by making minor changes in the kitchen to bring life to your space. For instance, you can paint the walls and cabinets, replace the flooring, install a granite countertop, and switch to energy-saving appliances.
Refresh Your Landscaping
The exterior of your home makes the first impression, and you can improve your home's curb appeal and value by landscaping. You can start by mowing the lawn, pruning the shrubs, raking the leaves, and painting the fence. Investing in landscaping makes a big difference to your home and is worth the time and money.
Also, plant bright flowers, and consider creating low-maintenance flower beds that enhance your yard's appearance. Pay close attention to how your house blends in with the neighborhood. Another trick is replicating how your neighbors have done their landscaping, whether trimming hedges or planting grass.
Update Your Bathroom
When choosing a house, buyers consider bathrooms one of the most critical spaces. Remodeling your bathroom is a cost-effective way of improving the value of your home and making your space more enjoyable. According to some realtors, you may be able to recover 57% of the cost of your bathroom renovations.
If you don't have room to add more space or cannot afford such an extensive project, consider painting a neutral color, switching to LED lighting, or adding energy-efficient fixtures. Consider the layout of your home and whether you can take advantage of the available space in your home and build an additional bathroom.
Improve The Energy Efficiency of Your Home
Energy-efficient additions to your home can lower costs and increase its value. Adding a smart thermostat or installing solar panels on your roof can greatly increase your home's efficiency and value if you're ready to invest more money.
The other ways to increase the efficiency and value of your home include fixing leaky windows, upgrading energy-efficient appliances, and insulating your home. It's worth mentioning that installing new appliances and windows might be more costly.
Enhancing the Value of Your Home Through Renovations in Calhoun County, Florida
Home improvements and repairs have many benefits. They bring your house to life whether you're doing minor maintenance or major renovations.
There is no doubt that remodeling can be expensive, but the benefits of home improvement far outweigh the costs. Your home can benefit from renovation in the following ways:
Improve Your Home's value
Renovations increase the value of your home, which is one of the most obvious benefits. Home renovations can significantly impact resale value so that you will benefit both during your stay and when it is time to sell the home in the future.
An Added Level of Comfort
Renovating your home by remodeling your bedroom, kitchen, or bathroom is a great way to make your home more comfortable.
It offers you a chance to personalize your home and give it a fresh look. You create a new place in your house where you can relax, be inspired, and improve your mental function.
A home improvement allows you to personalize your home according to your taste and style. You want a home that reflects your personality and expresses your feelings, and customization gives your home a unique look and design.
Your home will require less maintenance in the future by upgrading certain features in your home. Renovations can be overwhelming, but they help you maintain your house in the long run. Remodeling makes your home more energy efficient, increases your property value, and makes it a more comfortable place to live.
5 Favorite Dessert Spots Around Calhoun County, Florida
Dessert is essential to any great dinner, especially if you have a sweet tooth. Calhoun County, Florida is home to many delicious treats.
Whether homemade ice cream, cakes, cookies, or handmade chocolates, you can indulge in the sweet treats during your stay in Calhoun. Here are the top dessert spots in the county.
Chocolates at Kilwins
If you love chocolate, you must visit Kilwins in Calhoun County. A sweet aroma of decadent chocolate greets you with every step inside the shop. They offer an assortment of handcrafted premium chocolates.
They also serve delicious homemade fudge. Choosing an assortment will allow you to try as many as possible if you're unsure what to get.
Ice Cream at Shoobie's Frozen Treats
Shoobie's Frozen Treats serve some smooth and tasty soft ice cream. They also offer delicious Jersey gelato, cool water ice, and decadent sundae filled with toppings and come in chocolate, vanilla, or swirl. The water ice comes in eight flavors and is a perfect choice for a vegetarian because it has no eggs or dairy.
Donuts at Sweet BunZ
The popularity of donuts has grown beyond a breakfast staple, and Calhoun County offers a variety of this dessert. Sweet BunZ has got you covered with flavors ranging from chocolates to vanilla and blueberry.
No matter your taste, the shop offers handmade, fluffy donut specialties, and you won't miss your favorite donut. With the various flavor combinations available, you can try something new that's out of your comfort zone.
Pies at Buttermilk Sky Shop
The best way to end a hearty meal is with a delicious slice of pie. The Buttermilk Sky Shop makes mini pies from scratch with just the right amount of filling and toppings.
It's even better because there are so many pies to pick from, and the possibilities are endless, whether it's apples, cherries, key limes, pecans, or chocolate.
Milkshake at Sweet Spoon
The milkshake is one of the most popular sweet treats, doubling as a drink and dessert. The milkshakes are loaded with your favorite toppings such as sprinkles, candy, wafer cookies, chocolate, and even cookies. Sweet Spoon offers a variety of ice cream flavors and plenty of goodies to personalize your milkshake.
The Bottom Line
You can now afford to purchase and renovate your home at an affordable cost in Calhoun County, Florida, thanks to the FHA 203k loan. The renovation loan allows you to buy and repair your house with just one loan, eliminating the need for separate financing.
You can use the home loan to increase the value of your home and personalize it according to your needs. Find an FHA-approved lender and begin your home ownership journey.