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Program Guidelines

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Loan Purpose  
  • Purchase
  • Rate & Term Refinance
Amortization Term  
  • Fixed Rate: 15 Years and 30 Years
  • Owner-occupied properties only
Eligible Properties  
  • Attached / Detached SFRs
  • PUDs
  • HUD-approved Condos
  • Manufactured Housing
Minimum Credit Score  
  • 630
  • Additions and utility replacement and/or reconditioning require a minimum 740 FICO.

If bankruptcy, foreclosure, short sale or deed in lieu appears on credit report or public records, then the minimum FICO required is 680

Maximum DTI Ratios 4  
  • 45/50
Loan Purpose LTV CLTV
Purchase 96.5% 100%*
Rate & Term Refinance 97.75% 97.75%
  • *CLTV allowed is 105% for purchases, if using a Govt. Down Payment Assistance Program.
  • Maximum LTV for 2-4 unit properties, with non-occupying co-borrower, is 75%.
Maximum Loan Amount  
  • 1 Unit: Lesser of $417,000 or maximum county limit
  • 2 Units: Lesser of $533,850 or maximum county limit
  • 3 Units: Lesser of $645,300 or maximum county limit
  • 4 Units: Lesser of $801,950 or maximum county limit

Click Here for County limits

Loan Amount Calculation on Purchase Transactions:

  • Lesser of "As is value + Rehab cost" or "Sales price + Rehab cost"
  • Must not exceed 110% of after-improved value. For Condominiums, must not exceed 100%.
Loan Amount Calculation on Refinance Transactions:
  • 97.75% of lesser of "As is value + Rehab cost" or "Existing debt + Rehab cost + Closing cost and prepays"
  • Must not exceed 110% of after-improved value. For Condominiums, must not exceed 100%.

Non-occupying Co-borrower  
  • Allowed
Subordinate Financing  
  • Allowed
Down Payment Assistance(DPA)  
  • Allowed in conjunction with first mortgage loans with following overlays:
  • The DPA meets all published requirements of FHA; and
  • The first Mortgage sold to SWMC is not subject to any terms or conditions of a bond program; and
  • The DPA does not restrict the transfer of servicing rights of the first Mortgage sold to SWMC. In addition, it may not require prior notification or approval from the sponsoring authority in the event of the transfer of the first mortgage’s servicing rights.
Loan Amounts available on a 203k loan  

Non-Streamline 203k:
Repairs allowed up to 50% of the loan amount. (For repair amount constituting more than 40% of loan amount, max. LTV will be 100% calculated at after improved value.)

Streamline 203k:
The maximum rehab amount is $35,000 and will include at least 2 Inspection Fee draws, 2 title updates, and a 15% contingency reserve

Requirement of Home Inspection  

The Inspector must be approved by The American Society of Home Inspectors (www.ashi.org) or National Association of Home Inspectors, Inc. (www.nahi.org).

A complete home inspection is required for all REO and vacant properties and for properties with repair amounts exceeding $15,000. REO and vacant properties are eligible under streamline 203k; however, underwriter may advise about requirement of consultant depending on the scope of work.

Home inspections are not required for transactions using the services of RenovationReady (http://www.renovationready.com/)

Home inspectors may not be an interested party, including the 203k consultant.

203k Consultant & Contractors  
  • SWMC must approve the use of all parties involved, including the consultant and contractor as applicable.
Types of Repairs that are eligible for a 203k loan   Non-Streamline 203k:
Roof replacement, health and safety hazard mitigation, landscaping required to mitigate drainage or erosion issues, aesthetic landscaping when appraiser verifies that the value increases the dollar-for-dollar cost, sidewalk/driveway repair necessary for home access, major repair of termite damage, drywall/insulation replacement, most repairs which require permits, finishing basements. Egress window wells for basements will be admissible. Additions and utility replacement/reconditioning will be permissible borrower(s) decision credit score is 740 or above. Structural and Foundation work will be permitted as long as the Contractors insurance coverage is sufficient (normally general liability insurance coverage of 1,000,000/each occurrence will be acceptable).

Streamline 203k:
Cosmetic Repairs such as financing purchase/installation of new appliances; patching holes; replacing doors; painting; lead paint abatement; new counters, cabinets, windows, carpet (subfloor repair requires Non-Streamline 203k); repair/installation of HVAC; weatherization; minor repair of termite damage. The property should be inhabitable at the time of loan closing.
Repairs that are ineligible on a 203k loan  
  • Houses never completed or where the certificate of occupancy was issued less than one year ago. SWMC reserves the right to determine if repairs are deemed unacceptable.
Exclusions on a 203k loan   Streamline 203k:
Upfront draws are only available for documented material costs (with receipts or invoices). If the contractor is bonded, documenting material cost is not required to obtain an upfront material draw. Draws may not exceed 50% of the entire loan amount. If no draw is required, contractor must provide certification that no initial draw is necessary and that he/she has available funds to complete the cost of rehabilitation.

Geographic Restrictions:
SWMC will allow FHA 203K purchase loans in Texas only through retail channel.
Supplemental Origination Fee   1.5% of Rehabilitation Amount or $350, whichever is greater, must be charged
Additional Forms and Work Exhibits Requirements   Consultant, if applicable
  • Specification of Repairs and Work Write-up exhibits must itemize material and labor costs.
  • Consultant’s Identity of Interest
  • Master Draw Request (HUD-9746a)
  • Work Write-up exhibits must itemize material and labor costs.
  • Completed IRS-W9
  • License, E&O and/or Liability Insurance valid until rehabilitation is completed
  • Contractor Profile Form
  • Information for Contractors form
  • Homeowner and Contractor Agreement
  • Evidence of Assets or Sufficient Lines of Credit (VOD, Bank Statements, Credit lines etc.) to reasonably cover cost of material for rehabilitation. Draw request time line is taken into consideration. Not required when initial draw is provided on 203k streamline, see ‘Exclusion on 203k loan’ section above.
  • Borrower Identity of Interest Certification must be signed and dated by borrower(s), Consul
  • 203k Borrower Acknowledgement must be signed, dated and completed by borrower(s).
  • Conference call with borrower to be completed by SWMC.
Additional Guidelines   LandSafe Title is not acceptable as the title company

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Home Value: Enter your estimated home value.
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Eligible Repair & Improvements
Eligible Repair & Improvements
A 203k loan covers a variety of home repairs, renovations, and improvements. See the full list of what a 203k loan can do for you!
Read More
203(k) Program Guidelines
203k Program Guidelines
A 203k loan has a low down payment requirement compared to other rehabilitation options for financing which puts rehab projects, in reach for individuals who otherwise could not afford them.
Read More
203(k) Rates (Program Rates)
203k Rates
With a 203k loan, the borrower may simply obtain one mortgage, at a long-term fixed rate, to finance both the acquisition and the rehabilitation of the property.
Read More

Sun West Mortgage Company holds over 30 years of lending experience with a reputation of providing excellent customer service.

At Sun West, the complete loan cycle is processed in-house. From origination to underwriting and servicing, Sun West ensures you receive a simpler, faster, more direct borrowing experience with no back and forth intricacies. To see if you are pre-qualified or to obtain more information, call 1 (844) SUN-WEST .