A Home Loan to Help You Sell or Buy Your Fixer-Upper

By Sheryl Landrum
Home Worth Columnist

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Almost 60% of homes purchased today are bank-owned. While the house price may seem appealing, usually the repairs and TLC needed to bring the house into decent shape or market value can be prohibitive for many would-be home buyers or home sellers. Now, however, a little-known home loan may just help home buying and home selling become that much easier.

Streamline K Home Loans

The Streamline K home loan is a faster version of the FHA's home-rehabilitation loan product, 203(k). As with all FHA loans, the government insures the lenders who make them against loss should a home loan go into default. What this loan offers home buyers is the ability to add up to $35,000 to the home loan for necessary repairs or renovations to your fixer-upper. What it means to home sellers is the ability to refinance and use the $35,000 to make the necessary repairs and improvements to make your home more attractive to would-be buyers. So, what do you need to know?

Streamline K Home Loan Basics

Whether you are buying or selling a home and using a Streamline K home loan, here are the basics:

• As in all FHA home loans, mortgage limits max out at $729,750 until the end of 2008.
• FHA underwriting guidelines are followed.
• The program is designed for repairs that are minor and non-structural. However, you are allowed to repair the roof, plumbing, electrical, buy new appliances etc.
• You are not allowed to do room additions and site improvements such as landscaping your yard.
• Home repairs need to be completed in less than six months and no more than two contractors can be used.
• If the work cost exceeds $l5,000, a final inspection is required by the lender.
• Even if you are a contractor, you cannot be paid for work done to your own home.

This is a great program for those home sellers who are trying to increase their home's value in a tight market. It is also great for those homeowners who would like to buy a house but have no funds for home repairs after they move in. With the ability to access Streamline K funds, the program may even stimulate a sagging housing market. To find out more about Streamline K, go to www.fha.gov and search for Streamline K for exact details on how you and your house can qualify for these home improvement funds. Then find a reputable lender who's up to speed on these special home loans.

Source:
 The San Diego Union Tribune, Sunday, July 19, 2008, Uncle Sam's Little-Known Loans Worth a Second Look, by Lew Sichelman

About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage of San Diego at the Prudential Realty Office in Bonsall, California.