Have you heard of this loan: FHA 203K ? It is an FHA loan and it gives you money to fix up your home after your purchase and before you move in.
This was taken from a website online (actually many sites have this exact wording):
The 203(k) loan program offers borrowers the resources to rehabilitate a home that may be in need of repair, either the home that they currently live in, or that special fixer-upper opportunity. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.
Is this new?
No, this program has been around for a very long time, about 30 years. But people were refinancing with equity lines of credit so the 203K was not something that many loan officers would suggest.
Now these loans are being revisited because when most buyers today purchase a home. The home has room for improvement (to say the least). Meaning both the need to fix it up and the value of the home is sometimes higher than the purchase price.
Most real estate agents who just read that last line said “What?!?!?” This is because today the market is so crazy that appraisers are not appraising above the purchase price. In my opinion, it is probably because they do not want to get in trouble and do what they were doing in 2005. Yeah, over appraising!
But when you do a 203K plan the appraiser goes to the home looking for the actual value and appraising if there is room for money to be added for repairs. Most of the time there is.
If I were you I would look into the 203k plan if you plan on buying a real fixer upper.
Contact us and we could connect you to a loan officer that could get you approved for a 203k loan.
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