There is a Loan for a Fixer-up Purchase
October 25, 2010
The California Association of Realtors has a weekly "Market Matters" posting. The information on the site may be shared via e mails, web sites and now on this blog. This information apparently was published in the New York Times and addresses the FHA 203(k) loan program. This program was designed to assist purchasers of homes that need renovation. The home does not need to be unlivable, it may just be outdated. The property must appraise below market value prior to renovation and at market value with the repairs completed.
Like the traditional FHA loan programs, the purchase must be for the buyers primary residence and the down payment can be as low as 3.5%.
Luxury improvement s are not eligible, but a new roof or new heating system may be.
The borrower must use a HUD approved lender, appraiser and a contractor approved by the lender for repairs. One list of approved business can be found at http://www.203kcontractors.com/
Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans and come in 14 to 30 year terms either fixed or adjustable. Additional paperwork for inspection, appraisal and updating, and the like can increase closing costs by $1000 or more higher than the average.
For additional information about the FHA 203(k) rehabilitation program, go to http://www.hud.gov/offices/hsg/sfh/203kabou.cfm
(I hope that long URL works.)
The California Association of Realtors has a weekly "Market Matters" posting. The information on the site may be shared via e mails, web sites and now on this blog. This information apparently was published in the New York Times and addresses the FHA 203(k) loan program. This program was designed to assist purchasers of homes that need renovation. The home does not need to be unlivable, it may just be outdated. The property must appraise below market value prior to renovation and at market value with the repairs completed.
Like the traditional FHA loan programs, the purchase must be for the buyers primary residence and the down payment can be as low as 3.5%.
Luxury improvement s are not eligible, but a new roof or new heating system may be.
The borrower must use a HUD approved lender, appraiser and a contractor approved by the lender for repairs. One list of approved business can be found at http://www.203kcontractors.com/
Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans and come in 14 to 30 year terms either fixed or adjustable. Additional paperwork for inspection, appraisal and updating, and the like can increase closing costs by $1000 or more higher than the average.
For additional information about the FHA 203(k) rehabilitation program, go to http://www.hud.gov/offices/hsg/sfh/203kabou.cfm
(I hope that long URL works.)
posted by shirley harry at 9:24 AM
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