How is it possible?
FHA 203k mortgages are increasingly popular for adding a second level to an existing home using the FHA 203k in a refinance transaction (known as an add-a-level project). This is done by adding the existing debt of the mortgage (or mortgages if you have a first and second mortgage) and then adding the renovation or rehab budget to the loan. The important thing to remember is that with a FHA 203k refinance you are getting all one loan, which includes everything at a low interest rate.
Homeowners typically add second a level to a ranch home and move all the bedrooms from downstairs to upstairs and create a new, open living area downstairs including the living room, kitchen, and dining room. Adding a second level is increasingly popular in NJ, PA, DE, CT, MA, NH, MD, DC and CA- we have recently helped homeowners in all of those states. Annie Mac Renovation lending works with many builders who are doing these types of projects on a regular basis and these contractors can be found using the 203k Contractor directory found by clicking here.
Recent Project Video- the highlights! Enjoy!
So how about for people looking to purchase?
The FHA 203k loan is also great for customers who are buying an existing home that is smaller in size and who would like to live in a certain area. These home buyers will purchase a home with the intent to add a second level as part of the purchase. Buying a home using a FHA 203k loan is a great idea but it is extremely important that you are working with an experienced team as these types of projects require special coordination and handling. They do not need to be hard but if a party in the transaction (FHA 203k lender, contractor or consultant) do not have a proven track record then….. Buyer Beware!
FHA 203k lenders, like Annie Mac Renovation Lending, are doing more of these home renovation loans in like towns like yours all over the country!