How does the FHA home improvement or rehabilitation 203(k) program work?
The Federal Housing Administration’s 203(k) program is a loan option designed to help homeowners pay for remodeling projects, adding on rooms, and refurbishing their current home or one that is being purchased. The first step is getting preapproved by a lender. After the homeowner or buyer has determined what projects need to be done to the home, they need to get estimates on the desired improvements and have the home appraised. The appraiser will provide two values, an “as is value” and a “final value,” after the improvements are complete. After the values are deemed acceptable, the lender will have the loan ready to close. In certain situations a qualified FHA inspector/consultant and/or a licensed contractor would be involved in approving the home improvement plans. After the loan is closed, the money is disbursed to the contractor or remodelers as the work is completed and inspected. Homebuyers are able to move into their new home while the work is being completed. House Helper ans
