203k Streamline Questions

[Anonymous]

My husband and I have been approved for $110k (FHA). It's considerably lower than we hoped, we had issues including my child support so unless we manage to get that in we're stuck at this amount so we're trying to make the best of it. This price range means homes in bad shape, so i'm curious about getting repair costs worked in somehow.

We looked at a 1 3/4 story 5 BR foreclosure today that clearly needs work. It's an incredibly unusual floorplan. I honestly think it was a 3 BR and the owners put some walls in to create additional bedrooms (one BR is 7x12). It's definitely older (1939) but that's typical of this area. The most pressing repairs are in the living room. It's old plaster with holes in the walls in a couple spots, there are also missing tiles in the drop ceiling. The kitchen and bathroom could definitely use some work as well.

This home is $100 - does that mean we'd get $10k in repair costs because we're already approved for $110k? Or is it a completely seperate application/approval process?

I'm also wondering if removing bedrooms for less but larger rooms would hinder getting approved for a 203k streamline?

Any additional info about how they work would be great too!

[Anonymous]

There ia alot to getting a FHA streamline loan I know.  My concern is that the work you are describing would cost more than 10K to have a professional come out and do (at least here in So Cal).  for the FHA stuff, it is tough to do the work yourself.  I think you have to do the work and pay for it and then submit for reimbursement from the bank when it is completed all in a fairly tight timeframe.  that can be tough financially. The other option, if the house will appraise high enough, is to offer 10K more for the house with the repairs done by the seller.  Banks are not as likely to do this as a seller though because they don;t necesssarily have a general contractor on the line to do it.

I know I would be a little weary of a house that was that old and had been chopped up myself.  You couldbe looking at some fairly major repair bills.  definitley get an inspection if you do put an offer in and it is accepted.