203K Loans

Click here for our 203K Quick Start Guide

The 203K loan program enables you to finance both the purchase and rehabilitation of a one-to four-family property through a single mortgage. The 203K loan can be used to repair or upgrade an existing dwelling that you purchase in one of two ways:

  • Purchase a home and the land on which the home is located and rehabilitate it
  • Purchase a home on another site, move it onto a new foundation and rehabilitate it (loan proceeds for the moving of the house cannot be made available until it is attached to the new foundation.

The cost of rehabilitation must be at least $5,000 and your 203K loan amount will be based on the projected value of the property once the work has been completed and taking into account the cost of the repairs being done.

AnnieMac Home Mortgage offers 203K fixed rate loans and adjustable rate loans:

  • With a fixed rate loan, your rate is fixed and your payment remains the same throughout the length of your loan (i.e. 30-years, 25-years, 20-years and 15-years). A fixed rate loan is an excellent choice if you plan to live in the home for many more years.
  • With an adjustable rate loan, your rate will adjust and your payments will fluctuate based on changes in the market. However, the rate and payment remains unchanged during the introductory period which would be 3 or 5 years. The initial rate for an adjustable rate mortgage is usually lower than that of a fixed rate loan. After the introductory period expires, the interest rate is subject to adjust at predetermined periods, usually every six months. The rate adjustments are based on market interest rates and the adjustment caps limit how much your interest can adjust in a specified period of time. An adjustable rate mortgage is a great choice if you don’t plan to own the home for a long period of time.

The following types of properties are eligible:

  • Owner-occupied properties at least one year old
  • Attached and detached single family residences
  • One- to four-family property
  • Townhouses (PUD’s)
  • FHA-approved condos

FHA loan limits vary based on a variety of housing types and the state and county in which the property is located. Please call an AnnieMac Home Mortgage Licensed Mortgage Originator to discuss loan limits in your area.

FHA allows you to assume an existing FHA-insured loan. Or, if you are selling your home FHA allows a buyer to assume your FHA-insured loan. Assuming a loan can be very beneficial since the process is streamlined and less expensive compared to a new loan. Also, assuming a loan can result in a lower interest rate.




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