Options for Rehabilitation Mortgages in Connecticut
Although "mortgages" has connotations of a loan for purchasing a home, not all programs go toward this purpose. Especially as foreclosures or bank-owned properties are being bought, rehabilitation loans are necessary for making extensive repairs, modernization improvements, or fixing damaged systems.
If you plan to purchase a property needing repairs or remodeling in Connecticut, what options do you have for loans?
Available for areas across the country are FHA 203(k) and 203(k) Streamline mortgages. The mortgage, which can be taken out alone or used in conjunction with another Connecticut mortgage, covers the cost of repairs. Within Connecticut, these mortgages have specific income, credit, and employment qualifications, unless the property is within a federally-targeted area. The property itself must be a primary, year-round residence, a multi-family unit, a commercial property being converted into a residence, an FHA-approved condominium, or a multi-unit building being converted into a two- or four-family home.
The loan itself covers the cost of the property and rehabilitation, and improvements, which consist of several specific projects, must be listed in a written contract and be completed by a state-licensed contractor.
Improvements covered by FHA 203(k) and 203(k) Streamline loans vary. The former's are more specific: structural alterations or repair to damage; repairing termite or water damage; conversion of a single-family home into a duplex or a six-unit building into a three-family home; installing energy-efficiency features; repairing wells, septic tanks, windows, or hot water systems; repairing flooring, roofing, hand rails, downspouts, or exterior siding for improved livability; and adding or improving handicap accessibility.
203(k) Streamline loans have a cap of $35,000, and repairs must be made prior to the buyer moving in. Repairs for this rehabilitation mortgage are more general, consisting of improvements to the basement, deck or patio, electrical system, floors, or HVAC; minor remodeling; adding new appliances (up to $2,000) or new windows; painting; plumbing; roofing; septic or well repairs; weatherization; or a sewer hookup.
However, FHA 203(k) and 203(k) Streamline loans are not the only Connecticut rehabilitation mortgages. Meeting certain requirements, a buyer may be eligible for the Urban Rehabilitation Homeownership Program, or UR Home. Geared toward neighborhoods falling into disrepair, this Connecticut home improvement plan covers a below-market interest mortgage for purchasing a property and a no-interest home-improvement loan.
Applicants, however, need to meet a strict list of qualifications. The property purchased must be within Hartford, Bridgeport, New Haven, New London, Waterbury, or parts of Windham; must need repairs; must be a year-round single- or multi-family residence with no more than four units; and must not exceed CHFA town or city sales price limits. The borrower, as well, needs to be a state, municipal, or private employee of a company located in one of these cities or towns. If the buyer currently owns property, the previous residence must be sold before the UR Home loan is closed.
Repairs with a UR Home loan can go up to $20,000 and may include fixing structural damage, eliminating health and safety hazards, improving disability accessibility, and making energy-efficient improvements. Any funds from the loan not going toward improvements go back to CHFA.
If you plan to purchase a property needing repairs or remodeling in Connecticut, what options do you have for loans?
Available for areas across the country are FHA 203(k) and 203(k) Streamline mortgages. The mortgage, which can be taken out alone or used in conjunction with another Connecticut mortgage, covers the cost of repairs. Within Connecticut, these mortgages have specific income, credit, and employment qualifications, unless the property is within a federally-targeted area. The property itself must be a primary, year-round residence, a multi-family unit, a commercial property being converted into a residence, an FHA-approved condominium, or a multi-unit building being converted into a two- or four-family home.
The loan itself covers the cost of the property and rehabilitation, and improvements, which consist of several specific projects, must be listed in a written contract and be completed by a state-licensed contractor.
Improvements covered by FHA 203(k) and 203(k) Streamline loans vary. The former's are more specific: structural alterations or repair to damage; repairing termite or water damage; conversion of a single-family home into a duplex or a six-unit building into a three-family home; installing energy-efficiency features; repairing wells, septic tanks, windows, or hot water systems; repairing flooring, roofing, hand rails, downspouts, or exterior siding for improved livability; and adding or improving handicap accessibility.
203(k) Streamline loans have a cap of $35,000, and repairs must be made prior to the buyer moving in. Repairs for this rehabilitation mortgage are more general, consisting of improvements to the basement, deck or patio, electrical system, floors, or HVAC; minor remodeling; adding new appliances (up to $2,000) or new windows; painting; plumbing; roofing; septic or well repairs; weatherization; or a sewer hookup.
However, FHA 203(k) and 203(k) Streamline loans are not the only Connecticut rehabilitation mortgages. Meeting certain requirements, a buyer may be eligible for the Urban Rehabilitation Homeownership Program, or UR Home. Geared toward neighborhoods falling into disrepair, this Connecticut home improvement plan covers a below-market interest mortgage for purchasing a property and a no-interest home-improvement loan.
Applicants, however, need to meet a strict list of qualifications. The property purchased must be within Hartford, Bridgeport, New Haven, New London, Waterbury, or parts of Windham; must need repairs; must be a year-round single- or multi-family residence with no more than four units; and must not exceed CHFA town or city sales price limits. The borrower, as well, needs to be a state, municipal, or private employee of a company located in one of these cities or towns. If the buyer currently owns property, the previous residence must be sold before the UR Home loan is closed.
Repairs with a UR Home loan can go up to $20,000 and may include fixing structural damage, eliminating health and safety hazards, improving disability accessibility, and making energy-efficient improvements. Any funds from the loan not going toward improvements go back to CHFA.
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