FHA Streamlined 203(k) Overview
The Streamlined FHA 203(k) program is intended to facilitate uncomplicated 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. (Repairs of this nature would be considered under the Standard FHA 203(k) Program which is not offered at this time.)
Eligible Improvements: Examples of eligible improvements are listed below (this is not an
- Repair/replacement of roofs, gutters and downspouts.
- Repair/replacement/upgrade of existing heating, ventilation & air conditioning
- Repair/replacement of plumbing and electrical systems.
- Repair/replacement of flooring.
- Minor remodeling that does not involve structural repairs, such as kitchens
- Exterior and interior painting.
- Weatherization, including storm windows and doors, insulation, weather stripping,
- Purchase and installation of appliances, including free-standing ranges,
- refrigerators, washers and dryers, dishwashers and microwaves.
- Improvements for accessibility for persons with disabilities.
- Lead-based paint stabilization or abatement of lead-based paint hazards.
- Repair/replacement/addition of exterior decks, patios, porches.
- Basement waterproofing.
- Replacement of window and doors.
Most improvements are eligible provided they add value and are permanently affixed to the foundation. Improvements to detached structures and luxury items are not allowed:
- Luxury items include: Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, etc. Repair work to these items is also not allowed.
- Properties that require the following work items are not eligible for financing:
- 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;
- Any repair or improvement requiring a work schedule longer than six (6) months;
- 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 203(k) Eligible Work Items or that would:
- Necessitate a "consultant" to develop a "Specification of Repairs/Work Write-Up"
- Require plans or architectural exhibits;
- Require a plan reviewer;
- Require more than six months to complete;
- 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 mortgage loan closing).
Reinspection: If the cost of the renovation is over $15,000 then a second inspection by the original appraiser is required.
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