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Senior Finance

Is There an Easy Way to Finance a Handicap Conversion Project?

By: Liz Moore

Well, Iím not sure that there is an EASY way, but there is definitely a mortgage product for that.† Itís called a 203(k) loan, and itís an FHA loan product.† It can be used for either a purchase, or also on a refinance.

Essentially, it allows a borrower to add the cost of repairs to a mortgage, so that they can be financed over time.† On the streamlined plan, you can borrow up to $35,000 over the sales price for repairs or remodeling, as long as the appraisal will support it.

Here is how it works:† An appraiser will do an ďas isĒ appraisal, and then an appraisal that factors in your proposed repairs.† As long as the improved value can be substantiated, youíre good to go!† You must begin the work within 30 days of closing, and complete it within 6 months.†

The cost?† An extra 3/8 to Ĺ%† All other FHA guidelines apply:† a 3.5% down payment, a sales price maximum of $458,850 in this area.

You could use a 203(k) loan to retrofit for handicap, or to remove it and restore a home to its previous condition (removing wheelchair ramps and grab bars, for instance).

There are lots of nuances to these types of mortgages, and itís important that you work with a local lender who specializes in this product, so if you would like to learn more, just let me know and Iíll hook you up with a reputable loan officer that is experienced in 203(k)ís.

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You can reach us at 757-873-2707 in Newport News and 757-645-4106 in Williamsburg.  Just ask for the Liz Moore Senior Team!