Whats the most amount of money I can borrow with the FHA Streamlined (k) loan?
You can borrow up to $35,000 more than the amount you need to buy the home. Lets do some math as an example: Lets say you find a home that you can buy for $120,000. It needs a fair amount of work and updating. You make a list of things that need to be done, get estimates, and it comes to $30,000. Your lender tells you they want a 10% contingency reserve built into the loan another $3,000, making the total fix up loan amount $33,000. So youve got the purchase price of $120,000 plus the fix up loan amount of $33,000 for a total loan amount of $153,000. As long as the home will be worth at least $153,000 after the fix up work has been completed, you can borrow that additional $33,000. Not every lender requires the contingency (buffer) fund. But if they do, and you don’t spend it, you don’t lose it – any left over money is used to pay down the principal amount of your loan.
