203K Loans - The "But" Fixer
by Glenn Kavanagh
Have you ever looked at a home you wanted to buy because it was a great deal BUT it needed new carpet, BUT it needed new appliances, BUT it needed a new roof - and you didn't have the cash available to fix those items once you got into the house?
The FHA 203K Loan
You should look into the FHA 203K loan. I call the 203K loan the "But" fixer because the it can help you buy the home and give you the funds within your purchase loan to make those upgrades or repairs you'd like to make on the home before or after you move in. The fixer-upper is now within your reach!
An Affordable Dream Home
If you're on a budget, you may find that you only have a choice between houses that are too small for you or that need a lot of work before you can move in. There are, though, especially in this market, a lot of great fixer uppers that could be turned into dream homes with a bit of work. Even though you can't do any of the work yourself with the 203K loan(it has to be done by licensed contractor), you can often buy a fixer-upper and rehabilitate it for quite a bit less than you would spend on a comparable house in "perfect" condition.
How does it work?
The basics of the program work like this. We take the sales price of the house and add in the estimate of the costs to do the work you need to come up with the loan amount. When your loan closes, we place the repair funds into an escrow account to be dispersed to a licensed contractor when the work has been completed and inspected. The work must be done by a licensed contractor and they will only be paid after the work is complete.
You can get up to $35,000 for repairs or upgrades - even including things like new appliances!
There are many more details that I can't cover here but I'd love to answer your questions and help!
Please feel free to give me a call if you'd like more information. We offer the 203K loan at New American Mortgage and I'd love to help.
Happy house hunting!
Senior Mortgage Consultant
New American Mortgage