If you are considering buying a foreclosed property that is in need of repairs but you only have enough money for the down payment and the closing costs that are needed to buy a home with a FHA loan, you may want to look into the FHA 203K Rehab Loan Program.
When you buy a distressed property with the FHA 203K Loan Program, the costs to renovate the home can be included in the loan. The Department of Housing and Urban Development (HUD) administered this program to help single family properties that need repairs and rehabilitation.
By helping borrowers with the "fixing up" of a home, HUD believes this program will help neighborhoods get back into shape and revitalize communities and encourage home ownership in distressed neighborhoods.
When you buy a home with the FHA 203K Rehab Loan Program the costs to fix up the home can be included in the loan amount.
You do not need to be a first time home buyer to qualify.
This program can be used for home improvements on a existing one-to-four unit dwelling and must be at least one year old.
At least $5,000 worth of repairs are needed to qualify and closing must take place prior completion of any repair work is completed or started. A licensed contractor is required to estimate total cost of repairs needed.
What is eligible for improvement under the 203(K) program?
The repair or replacement of roofs, gutters and windows
The repair or replacement of flooring
The repair or replacement of the electrical system
Minor remodeling such as upgrading the kitchen or bathrooms
Updating with paint, inside and outside
The repair or replacement of a deck or patio
Installation of newer energy efficient windows.
Things to think about when considering a FHA 203K Rehab Loan.
Are you a handyman or do you know of anyone who can help with the repairs of your new home? Fixing up a home is not easy. Having someone who can help and advise you is essential in completing any remodeling project. You may have to hire a licensed contractor.
Do you know a licensed contractor you can trust? You want to feel comfortable the person you hire knows what he/she is doing and you are not wasting your money.
Deciding what repairs and replacements you will spend the money on and not over spending. Some homes will have several things that need updating or repaired. You need to be realistic and write down what is important to you and your family and decide what needs improvement and what does not.
Not all lenders offer the FHA 203K Rehab Loan Program. Be sure to ask your lender if they offer this program.
The home must be owner occupied to qualify for the FHA 203K Loan Program. No investors or renters.
If you are considering buying a foreclosed property why not consider applying for the FHA 203K Rehab Loan Program to help with the cost of repairs of your new home?
Just think of how much value and equity you will add to a distressed property simply by doing any of the above improvements and repairs. Taking advantage of the HUD's FHA 203K Rehab Loan Program is an excellent way for home buyers who are low on cash to afford to bus a distressed property and turn it into your dream home.
Authored by Terrie Leighton. Terrie is a licensed real estate agent with Ferrari-Lund Real Estate serving Northern Nevada. To see a list of homes in Northern Nevada please see, Northern Nevada Real Estate for a complete list. To contact Terrie, call 775-846-5424 or email her at TerrieLeighton@hotmail.com. Visit her real estate blog at www.SellingRenoandSparks.com.
All information in this post is believed to be accurate but is not guaranteed.