What Are Required Improvements For FHA 203k Loans?In order for a dwelling to be eligible for participation in FHA 203k loans, they must be a one to four family dwelling that has been on its foundation for at least one year. The dwelling can be a burnt down dwelling just as long as there is still the foundation left. The FHA 203k loans have rules when it comes to what dwelling qualifies and what improvements need to be made after the FHA 203k loans have been disbursed and endorsed by HUD. The use of the FHA 203k loans can be used in one of three ways which are to purchase a dwelling in order to rehabilitate it, to purchase a movable dwelling and purchase a separate site with a foundation and move the dwelling onto the new site to rehabilitate it, or to refinance existing FHA 203k loans for a new dwelling that needs to be rehabilitated. For the most part, the FHA 203k loans are used to rehabilitate new dwellings for new home owners. There are several required improvements when a dwelling is financed with the FHA 203k loans and these required improvements must comply with cost effective energy conservation standards These standards under the FHA 203k loans involve specific construction that must conform with local codes and the HUD minimum property standards. The standards for the FHA 203k loans involve the standards that include the thermal efficiency of the dwelling which are weather stripping of all doors and windows, caulk and seal all cracks, openings, or joints, insulate all openings in exterior walls, and adequately ventilate attic and crawl space areas. The standards for the FHA 203k loans for replacement systems are the heating, ventilating, and air conditioning system supply and return pipes and ducts must all be insulated, the heating systems, burners, and air conditioning systems must be no greater than 15 percent oversized for its critical design. The FHA 203K loan standards also have stringent rules about smoke detectors being installed in all of the sleeping areas and the smoke detectors must be approved, listed and labeled. When getting the FHA 203k loans, there are two separate determinations for the value of the dwelling and these are its as-is value and its value after the rehabilitation. These will be the two appraisals on the property and then the secured FHA 203k loan will be valued and put in to place once all rehabilitation is done. |