Posted 11-19-2024

Limited 203k: A New Era for Home Improvement

This is for the borrower whether it be a home buyer or a n owner wanting to oversee the improvements on their renovation project.

Big news for home improvement enthusiasts! The Limited 203k program has undergone significant changes, offering more flexibility and higher limits.

Key Updates:

• Self-Help and Subcontractors: You can now take on the role of contractor for non-structural work, and hire up to 5 subcontractors.
• Increased Limit: The self-help limit has, more than doubled, from $35,000 to $75,000.
• Extended Timeline: You now have six months to complete your project, providing ample time for renovations.
• Interim Inspections: Projects exceeding $15,000 may still require interim inspections, often conducted by the lender or loan officer.

Important Considerations:

• Structural Work: While you can update kitchens and bathrooms, avoid structural changes like removing bearing walls. Otherwise it isn't considered a Limited 203k any longer.
• Contingency Reserve and Fees: Remember to allocate funds for a contingency reserve and loan costs, which typically amount to around $800 plus the contingency.
• Lender Requirements: Specific requirements may vary by lender. Some may waive the contingency reserve, while others may mandate it.

A Word of Advice:

Consider hiring a 203k consultant to oversee your project. They can provide valuable expertise and ensure compliance with regulations.

These changes, effective November 4th, 2024, offer exciting opportunities for home improvement. Take advantage of this streamlined process to transform your home!