That's right - 203K - more specifically FHA 203K. This is a fantastic way to buy a distressed home and borrow the money to pay for those repairs and updates you need to do. This is a loan that combines purchase price with fix-up costs in one loan.
I had clients about six months ago who wanted a home but didn't have could afford about a $75,000 purchase. In the Twin Cities this doesn't buy a great home. They found a three bedroom foreclosure in the area they wanted but it was a foreclosure and needed some work. They purchased the home for $67,000 and added $10,000 to that price for repairs. They had a contractor give an estimate and when the lender appraised the home they had it appraised showing value prior to repairs and value with repairs. They have lived in the home for about four months now. She facebooked me this week saying how she loves her home more every day.
If the home needs a fresh coat of paint and some new carpet you could use the FHA 203K loan for this. If the home needs major repairs you could use the FHA 203K loan for this.FHA loan limits vary by market area and range from $271,050 to $729,750. You can put 3.5% and your credit score has to be a minimum of 640 and you do NOT have to be a first time buyer.
If you are thinking of buying a fixer this may be for you. Check with your mortgage broker. If you don't know someone who is familiar with these loans, contact me. I can put you in touch with someone who is very familiar with the FHA 203K loan.
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