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$35,000 for home upgrades and renovations

December 23rd, 2013 9:04 AM by Sam Kader

The Streamlined FHA 203(k) program is intended to facilitate uncomplicated & cosmetic rehabilitation and/or improvements to a home for which plans, consultants, engineers, and/or architects are not required. Due to the rehabilitation amount limitation of $35,000, eligible improvements are limited and can not include any major rehabilitation or remodeling, new construction such as room addition, repairs to structural damage, or site amenity improvements.

Let me help you purchase your dream home and have $35,000 for the home upgrades you always wanted:

  • Repair/replacement/upgrade of existing heating, ventilation & air conditioning systems.
  • Repair/replacement of plumbing and electrical systems and flooring.
  • Minor remodeling that does not involve structural repairs such as kitchen and bathroom remodeling.
  • Exterior and interior painting.
  • Improvements for accessibility for persons with disabilities.
  • Lead-based paint stabilization or abatement of lead-based paint hazards.
  • Replacement of windows, doors and exterior wall re-siding.
  • Pool repairs up to $1,500 total for minimum health and safety items.
  • Repair/replacement/addition of exterior decks, patios, porches, and proofs.
  • New roofs, gutters, down spouts, paint, plumbing/electrical repairs.
  • New kitchen appliances including free-standing ranges, refrigerators, washers, dryers, dishwashers and microwaves.
  • Weatherization/energy efficient improvements including storm windows and doors, insulation, weather stripping and exterior wall re-siding.
  • Basement waterproofing.
  • You select the contractors.

Most improvements are eligible provided they add value and are permanently affixed to the foundation.

The following projects are considered inelligible:

  • Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall;
  • New construction (including room additions);
  • Repair of structural damage;
  • Repairs requiring detailed drawings or architectural exhibits;
  • Landscaping or similar site amenity improvements;, including driveways and sidewalks;
  • Any repair or improvement requiring a work schedule longer than six (6) months; or
  • Rehabilitation activities that require more than two (2) payments per specialized contractor.
  • The Streamlined 203(k) program may not be used to finance any required repairs arising from the appraisal that do not appear on the list of Streamlined (k) Eligible Work Items or that would necessitate a consultant to develop a specification of repairs or work write-up.
  • Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the loan closing).

Contractor(s) Requirements.

All loans require that all borrower-selected contractors sign the Homeowner/Contractor Agreement and FHA Rehabilitation Agreement before closing. 

  • Contractors must be licensed, possess work experience, and references from prior work.
  • Rehabilitation construction must begin within 30 days of closing and must be completed within 6 months of closing.

Several ideas where to hire contractors:

  • Pro - Input specific project ideas and instant price estimated.
  • Porch - Locate contractors and view past projects.
  • Red beacon - Receive bids from multiple contractors (HomeDepot).
  • Zillow Digs - Share photos of design and remodeling projects with price estimated.
  • HomeKeepr - Online marketplace with 5 million recommendations.
Appraisal Requirements

All appraisals for FHA loans must be completed by a HUD-approved appraiser. The Loan-To-Value (LTV) is based on the lesser of:

  • The sales price or "As Is" appraised value plus borrower paid repairs minus sales concessions OR
  • 110% of "As Completed" appraised value as provided by the appraiser. The contractor's bid or borrower's work write-up must be available for the appraiser to determine the "As Completed" value.

Call me to discuss your options.



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Pacific Coast Financial LLC

Lic# MB 78982

2150 N. 107th Street Suite 170
Seattle, WA 98133