Buying a Fixer-Upper? Consider the FHA 203K Loan

Construction Worker Drilling

Are you having a hard time finding a property in your price range? Have you considered a fixer-upper?  If you find a house with potential on the lower end of your budget, an FHA 203K rehabilitation loan allows you to finance repairs and the house purchase in one loan.  A bedroom addition, a family room extension, an upgraded kitchen and a bathroom remodel are a few of the options available to you with an FHA 203K rehabilitation loan.

 

Five Reasons to Consider FHA 203K Loan

 

  1. Turn an average home into a dream home. Qualifed homebuyers can improve less-than-perfect homes in desirable locations or address property shortcomings immediately without draining savings.
  2. Make the home your own – removing the previous owner’s style. Everyone has different tastes – you don’t have to live with the previous owner’s choices.
  3. Fix things the previous owner may have ignored – windows, roof repairs, etc.
  4. Get more house for the money. REOs and foreclosures are still a large part of the real estate inventory. Buyers can take advantage of reduced home prices.
  5. Rolling rehabilitation costs into the mortgage allows borrowers access to repair funds at lower rates.

 

FHA 203K Program Eligibility

 

  1. Down Payment – 3.5% of total amount of purchase plus costs of repairs – gift funds allowed
  2. Seller contributions – seller may contribute 6% of purchase prices toward closing cost and prepaids
  3. Purchase of owner occupied primary residence that have been completed for at least one year.
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