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203K Streamline Cheat Sheet

The Basics
3.5% Down Payment Down Payment Gifts Allowed 640 Fico Score 1-4 Unit Properties 6% Seller Credits for Closing Costs 30 Year Fixed Rates $30,000 max repairs required 10% Reserve Budget added to quote Re-inspection fee included in loan Title update included in loan Up to 3 Licensed Contractors Allowed 6 Months to complete work

Types of Repairs
Roof/Gutters/Downspouts Flooring & Carpeting Mechanicals Interior & Exterior Painting Bathroom/Kitchen Renovation Plumbing & Electrical Appliances Windows (Weatherproofing) Exterior porch, deck & patios Basement finishing/remodeling Basement waterproofing Septic/Well replacement/repair Lead Abatement

Contractor Information

Steps in 203K Process


Show Home/Make list of Repairs Have Buyer contact Loan Officer Recommend licensed contractors Have Contractor write up quotes Provide Loan Officer with Quotes Make offer & Sign P & S if Accepted P & S must be Subject to 203K loan Normal Loan process to Closing After loan sold, 30% dispersed Job completed, inspected, funds paid

Licensed/Insured Required
Up to 3 Specialty Contractors/home References must be provided 5 Forms executed by Contractor Itemized quote on letterhead with fee Quote signed by buyer/contractor 30% funds given at initial deposit Balance paid upon final inspection 6 months to complete job

Important Reminders
Borrowers must qualify for purchase price & repairs (Look at homes under budget) House must appraise as-is and after improvements made to cover repair costs Contractors must be licensed, insured, reliable & understand when/how their paid Remember, No structural repairs are allowed (moving walls, etc)

Lynda Mckenzie 401-524-9796 NMLS#137627/RI license#137627