Many Ways to Finance your New Home - 203K

I took a class last week from a well known real estate instructor in my area, and she talked about how real estate agents need to be aware of the many different ways that a person can get financing for their new home.  I knew there were more than a couple of types of financing available, but I had no idea how many!  The list she gave us had 57 different types of financing!  If you want the whole list, you need to work with me as your Realtor.  Today I want to focus on two different rehab loans, backed by FHA.

203K Loans - There are two kinds of loans that FHA insures that are in the 203K program.  If you have ever found a house that needs a lot of work but is at a great price in a great neighborhood, this could be the loan for you.

A traditional 203K loan is an FHA loan for houses that needs renovations and rehab.  Basically, you can roll the money you need for improvements right into your mortgage.  You hire approved contractors to do the work, and have a finished product you can be proud of.  Some of the approved improvements are on this list from the HUD website.
 

• structural alterations and reconstruction 
•  modernization and improvements to the home's function 
• elimination of health and safety hazards 
• changes that improve appearance and eliminate obsolescence 
• reconditioning or replacing plumbing; 
• installing a well and/or septic system 
• adding or replacing roofing, gutters, and downspouts 
• adding or replacing floors and/or floor treatments 
• major landscape work and site improvements 
• enhancing accessibility for a disabled person 
• making energy conservation improvements

Also available is a 203K Streamlined Loan.  Have you fallen in love with a house that has a kitchen from the 70's or a bright pink bathroom from the 50's?  This might be the loan for you! 

If a 203K loan sounds like something you are interested in, you need to talk to your lender.  The lender must be approved to do 203K loans, and you can start by searching here or by calling around and asking.  

You can find a lot of information on the HUD website and another basic description here.

Don't be afraid of Fixer Uppers!

Jennifer