Will A FHA 203K Loan Cover A New Swimming Pool?
As 203(k) renovation mortgages gain in popularity, many of you have recently asked me whether cosmetic repairs and upgrades are eligible. While there are limitations to the things you can do with a 203(k) renovation loan, they are small when you consider what your clients CAN do! The FHA 203(k) loan was designed to rehabilitate a home that has safety and soundness defects such as unsafe electrical wiring or a failed roof. However, it also allows the homeowner to make many wonderful improvements to the home, such as renovate an outdated kitchen, install central air conditioning, add a bathroom or even create additional square footage and living space. A 203(k) loan will allow the homeowner to perform desired improvements to a property up to 10% over the after-repaired appraised value of the home. So no, unfortunately, it will not cover the addition of a new swimming pool, however it will allow repairs to an existing pool structure up to a specific amount.
As an FHA-Certified consultant, one of my roles is to inspect a property and determine which repairs are mandatory (necessary to reach FHA Minimum Property Standards), recommended (for example, replace older, poorly functioning windows) and desired (cosmetic or other upgrades). From there, I assist the homeowners and their mortgage professional with every remaining step in the process.
The 203(k) loan is able to be used for any property up to a four-family dwelling. The loan holder must occupy the property, but in the case of a multi-family dwelling, the borrower can use the other units for tenants.
Call us to schedule a 203(k) consultation or to ask questions about the process.