Today’s real estate market presents a lot of opportunity for interested home
buyers—with the growing supply of foreclosure properties and short sales, there
are certainly some great deals to be had.
The problem in buying a “distressed” property, however, is that these homes are
often damaged due to lack of maintenance or prolonged vacancy. So while the
price tag might be right, the investment necessary to make the home livable
might just push buyers well beyond their budgets.
As a member of the Top 5 in Real Estate Network®, however, I have access to the
latest information on mortgage and financing options. One particular option
that is providing hope for many of today’s home buyers is HUD’s FHA 203k
program, a loan that enables buyers to not only secure a mortgage, but receive
the funds necessary to improve the home as well.
are five facts about the 203k program to help you determine if it might be the
right fit for you:
FHA Section 203k program was originally introduced by HUD
in 1978 as a program to rehabilitate and repair single-family homes. The 203k
is a single mortgage loan that provides funds to purchase a home and make
repairs and improvements. A simpler version, the Streamline 203k, was
introduced in 2005. This version offers less documentation and lower loan fees
for renovations that don’t exceed $35,000.
today’s market, conventional financing, which often requires
20% – 25% down on a home and a perfect credit score, is often hard to come by.
However, with less-than-perfect credit and as little as 3.5% down, you can get
an FHA loan, such as the 203k.
203k approval process is a little more complicated than a
conventional loan. For example, you’re required to secure renovation costs from
an established, licensed contractor and deliver a package of the proper
paperwork to the lender to secure FHA approval. Make sure you work with an
agent—like a member of Top 5—who is well-versed in the 203k program, or who can
connect you with a lender that is.
203k loan is not just for foreclosure or distressed properties.
More than 80% of the homes in America were built before 1990—that’s over 100
million homes that are 20 years old or older—and almost every one is in need of
some amount of repair and updating. The 203k loan, therefore, offers advantages
for almost any home purchase.
203k loan is not just for home purchases but can be used to
finance a home improvement, as well!