Loans For Florida Blog

FHA 203k Renovation Loans in Florida are attracting First Time Buyers November 9, 2009

FHA 203k Renovation Loans in Florida are attracting First Time Buyers more today then in recent years as the Government is trying to encourage the use of the FHA 203k Loan and the FHA 203k Streamline Loan.  The FHA 203k renovation loan became much more popular over the last 2 years as loan options for first time home buyers from FNMA and FHLMC became tougher to qualify for due in part to the Federal Government having to take over the two large government entities that were set up by congress to back mortgages.  Instead of helping first time buyers with low down payments most programs backed by FNMA and FHLMC started requiring a much larger down payment.  When it came to renovation loans the down payment requirements increased as well.

The down payment went from 5% down to either 10% or 20% depending on the part of the country that you were looking for a loan in.  In Florida 10% down was required for a conventional renovation loan by those lenders who offered it.  Many did not.  Also credit scores increased as well.  This resulted in the increase in popularity of the FHA 203k renovation loan and a new program the FHA 203k Streamline loan.  The FHA 203k Streamline loan was created by FHA in the early 2000′s in an effort to help control some of the costs that made the program less attractive to First time buyers and home buyers who were looking at a home that didn’t need much work and the repairs were non structural in nature.

The FHA 203k Streamline loan can have up to $35,000 in repairs.  This is up from $15,000 in repairs when the program was first rolled out.  It was a popular program when it first came out and has continued to grow in popularity now that the conventional renovation options are less attractive to a larger number of potential home buyers.  Of course the FHA 203k and the FHA 203k Streamline are for primary residences only and thus more likely to be used by First time home buyers.  In the Florida market where many homes are sold to 2nd home buyers and investors, the conventional renovation loan is the only option.  The buyers of the Florida 2nd homes and investment properties will not have an option of using the FHA 203k renovation loan or the FHA 203k Streamline renovation loan.  If they want to take advantage of the huge number of bank owned properties and short sales that liter the state of Florida and the properties are in need of repairs then they will have to be better qualified with higher down payments and higher credit scores.

Lucas