The FHA 203K Streamline Program provides up to $35,000 toward property repair or rehabilitation, and combines it with funds needed to purchase or refinance. Only one appraisal is required to show the value with the improvements.
If the lender is a Third Party Originator (TPO), the borrower is given three months from the closing date to complete all work. KHC oversees the repair escrows for TPOs and requires the TPOs to charge a Supplemental Origination Fee, calculated as the greater of $350 or 1.5 percent of the rehabilitation cost (reflected on page 2 of GFE in Block 1). This fee is paid to KHC for maintaining the repair escrows.
If the lender is an FHA Mortgagee, they may follow FHA agency guidelines regarding the allowable time period for work completion. The FHA Mortgagee must oversee their repair escrows, and may charge the Supplemental Origination Fee. Full information is available in the documents below.
FHA 203K Streamline Reference
FHA 203K Streamline Origination and Submission Forms
FHA 203K Streamline Closing and Escrow Forms