By: Doug Bullwinkel

FHA’s Limited Repair Program “Streamline (k)” makes FHA-Insured loans more attractive for properties that are sold in “as-is” condition.  Sellers can market their property without making any repairs and the buyer can finance required and optional repairs at close of escrow, before moving into their new home.

The Streamline (k) program is primarily for basic repairs, working ideally for Bank Owned or REO properties needing uncomplicated repairs or remodeling.   A General Contractor is NOT required, but licensed or bonded contractors are required to be used unless the buyer can demonstrate expertise or past experience in making repairs.

No inspection is required when work is completed if the amount of repairs is less than $15,000, with all repairs being done AFTER Close of Escrow.

The buyer is required to submit written bids from appropriate licensed contractors for any repairs to be financed.  Those repairs are limited to categories that don’t require professional assistance and include, but are not limited to these eligible items:

Minor remodeling, such as kitchens and baths not requiring structural repairs,  roofs, gutters and downspouts, painting, plumbing and electrical systems, decks, porches and patios, septic systems or well repairs, flooring, window and door replacement, exterior siding, appliance replacement and weatherization.

Room additions, entertainment items like home theaters, hot tubs and swimming pools are NOT ALLOWABLE under the Streamline (k) Repair Program.

The FHA Streamline (k) Program allows buyers with limited resources to purchase, repair and upgrade a property with a minimum investment. When used properly, this will allow FHA buyers to purchase REO properties, and others, on a level playing field when sellers are not willing to do repairs.

There are other loan programs available for Home Renovation. These include Conventional, VA for Veterans and Home Equity Loans. Contact Doug Bullwinkel at 916-295-0044 for additional information or email him at dbullwinkel@emortgagecapital.com.