FHA 203(k) Streamline Loans

This is not actually a refinancing product, but a rehabilitation loan, offered by the FHA, that allows for remodeling, reconstruction, or repairs on a home. Often a borrower will find a home that would be ideal for their needs; it has the right location, the right size, and the right amenities, but it isn’t quite move-in ready. Perhaps the roof needs to be replaced or the plumbing needs to be updated. Perhaps the electrical system needs to be brought to current code. Either way, a rehabilitation loan gives borrowers the money they need for the purchase of the property and the money they need for rehabilitating the house. In many cases, this means they are getting a loan with an LTV above 100%, possibly 110% or even 125%.
203(k) loans allow borrowers to take out an additional $35,000 for the repair and renovation of a property. However, they can have a difficult approval process. There is a lot of paperwork involved, and you must go through an extensive process to get the money needed for renovations. Like FHA Streamline Refinancing, FHA 203(k) Streamline loans seek to expedite the process, allowing for faster approval.
To be approved, you simply need to meet these requirements:
Work with an FHA-approved lender
Have no foreclosures or bankruptcies in the past 3 years
Have a provable income and stable employment history
Bring a down payment of 3.5%
Have a minimum credit score of 640
No more than one late payment over the past year
With the $35,000 that you can get for repairs, you have the option of performing many projects, including:

Roofing, gutters, siding, and soffits replacement or repair
New roof installation or roof repair
Flooring installation
Purchase and installation of new appliances
Heating, air conditioning, or duct repair
Door or window replacement
Lead-paint mitigation
Plumbing repairs or installation
Electrical updates
Waterproofing for basement
With 203(k) Streamline, certain projects are not allowed, including:
Repairs to the foundation
Projects that will take over three months
Construction that is not part of the property in question
New room additions (including bedrooms, bathrooms, living rooms, etc.)
Pool or hot tub construction and installation
In the past, there was a minimum of $5,000 to use 203(k) Streamline, but that has been eliminated.