FHA borrowers can now add home repair costs to their home purchase mortgages.
A new version of the Streamlined (k) loan allows up to $35,000 in home repairs to be rolled into mortgages insured by the Federal Housing Administration, according to an announcement from the National Association of REALTORS. Straightforward home repairs allowed include the replacement of a roof, windows or furnace.
FHA Commissioner Brian Montgomery reportedly announced the changes at the group's annual conference in San Francisco over the weekend.
"The program is a financing tool for the average homebuyer who wants to make simple changes, such as updating the appliances or replacing flooring or installing new windows to make the home more energy efficient," Montgomery reportedly told the REALTORS. "FHA is under new management and we are changing."
The commissioner also discussed the agency's recent decision to accept Fannie Mae appraisal forms in lieu of FHA appraisals -- a statement what was "met with applause from the Realtor audience," the statement said. The group noted that specialized FHA appraisals often required so many repairs before closing that homebuyers were often directed elsewhere for a mortgage.