FHA 203k Streamline: What’s in a Name.
You might have heard the term “streamline” associated with FHA but did you know FHA has two types of streamline loans?
There is the FHA 203k Streamline, used for renovation and remodeling, and there is the “regular” FHA Streamline used for refinancing an FHA loan. Both are designed to reduce the processing time in getting an FHA loan but they are very different loan products and should not to be confused with one another.
With no mention of the 203k, the FHA Streamline is just a standard FHA loan without any renovation funds included. What makes it a streamline is that you are replacing your existing FHA loan with another with no cash out but with better terms such as lowering your payments. Because of that your FHA lender can streamline the loan process without an appraisal as it is an FHA refinancing another FHA loan.
FHA 203K Streamline
The 203k loan is an all in one loan and is used for financing a home as well as any renovation or remodeling needed for that home. There are two different types of 203k loans, the Standard 203K and the Streamline 203K. The 203k Streamline is designed to help you complete home improvement projects that are not structural and under $35,000. Because of the loans limitations it’s considered a streamline in comparison to its counterpart the Standard 203k, so your closing time and disbursements of funds should end up taking less time.
As far as the 203k requirements – 203k Streamline loan requirements and FHA 203k guidelines are similar to a Standard or “regular” FHA loan without any rehab funds. FHA 203k Streamline rates are also comparable to Standard FHA loans without any rehab funds as well.
The FHA 203k Streamline is a great loan for both purchases and refinances. It can cover most kitchen, bathroom, heating, cooling, plumbing, electrical, roofing, flooring, and painting home improvement projects plus the purchase and installation of appliances. But not to fear for the renovation projects not covered in the 203k Streamline loan, as the full Standard 203k is still at your disposal. So selecting an FHA 203K Lender who can do both the Standard 203K and the Streamline has its advantages.