It feels like winter this Tuesday, February 23, 2010 in Bellingham, WA. We’ve been spoiled the past few weeks with such nice, warm weather. We were even thinking spring, but alas, today is a reminder that we have a bit of a wait!

Are you thinking of purchasing a home, but the one you like within your price range requires repairs per the inspection? You don't want to drain what little bit you have in your savings. Ask your real estate agent about the Streamline (k) Limited Repair Program to augment FHA’s existing Section 203 (k) rehabilitation program for less extensive repairs and improvements.

The Streamline (k) program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. This program includes the discretionary improvements and/or repairs listed below: 

• Repair/replacement of roofs, gutters and downspouts
• Repair/replacement /upgrade of existing HVAC systems
• Repair/replacement of flooring
• Minor remodeling, such as kitchens, which does not involve structural repairs
• Painting, both exterior and interior
• Weatherization, including storm windows and doors, insulation, weather stripping, etc.
• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
• Accessibility improvements for persons with disabilities
• Lead-based paint stabilization or abatement of lead-based paint hazards
• Repair/replace/add exterior decks, patios, porches
• Basement finishing and remodeling, which does not involve structural repairs
• Basement waterproofing
• Window and door replacements and exterior wall re-siding.
• Septic system and/or well repair or replacement

Given the need for homeowners to make minor repairs without exhausting personal savings, and in consideration of the increasing cost of materials, the minimum repair cost of $5,000 is eliminated and the ceiling in now raised to $35,000. This revised maximum repair/rehabilitation amount recognized the cost of making older homes more energy efficient. When the repairs exceed $15,000, the mortgagee must perform or obtain an inspection to determine that all listed repairs were completed.

 Properties that require the following work items are NOT eligible for financing under the Streamline (k):

• Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall
• New construction (including room additions)
• Repair of structural damage
• Repairs requiring detailed drawings or architectural exhibits
• Any repair or improvement requiring a work schedule longer than 6 months or
• Rehabilitation activities that require more than 2 payments per specialized contractor

 Also  mortgagors may NOT use the Streamline (k) program to finance any repairs that would: 

• Necessitate a “consultant” to develop a Specification of Repairs/Work Write-Up
• Require a plan reviewer
• Require more than 6 months to complete
• Result in work not starting within 30 days after loan closing, or
• Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the mortgagor would be able to occupy the property after mortgage loan closing.) ** 

**www.hud.gov Mortgagee Letter 2005-50