Tuesday, December 24, 2013 - Article by: Joe Metzler, MLO. NMLS #274132 - Mortgages Unlimited, Inc -
Found your dream home - But it needs a little repair? The FHA 203k rehab loan to the rescue!
Minneapolis, MN: The FHA 203(k) loan program offers borrowers the resources to buy that great fixed-upper home opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.
There is no doubt that the current real estate market offers a lot of great bargains on bank owned, Foreclosed, REO, Repo'd, etc homes. However, many of these homes are in poor condition. Missing appliances, ruined carpet & flooring, holes in the wall, etc. Most lenders don't offer loan programs that will be able to help folks buy homes in this condition.
This is where a little known program called the FHA 203K Rehab loan comes in. The FHA 203K Rehab loan is becoming very necessary for the purchase of many Bank Owned, REO, or Repo properties.
FHA 203K streamlines loans make the process of buying a home that needs a little TLC (or quite a bit in some cases!) easier, more affordable, and quicker. Many of us have seen firsthand, or have heard stories about foreclosed home that have been torn up, stripped, vandalized, etc. With conventional financing, these homes are very difficult to sell or buy, as they are not in move in condition, and most lenders will not lend on a damaged home.
Is a 203(k) Loan Right for You?
- Buy a "Fixer-upper" or foreclosure property needing renovation- Get funds to both purchase and upgrade your dream home
Advantages of 203k loan
- Loan amount based on the home value including renovations- Only one loan needed to both purchase and improve
- Can be used to buy property otherwise not eligible for financing
Who Qualifies for a FHA 203(k) loan?
- A minimum down payment of 3.5%- A credit score of 640 or higher- You currently have no other FHA loans- You DO NOT have to be a first-time buyer- Home will appraiser for the purchase price PLUS repair costs when repairs finished- Loan amount meets FHA Loan limits, which vary by county (Check FHA limits in your area)
Didn't find the answer you wanted? Ask one of your own.