If you plan on purchasing a fixer-upper but don’t have the funds to make repairs upfront, the FHA 203K loan may be a great option for you.
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There are many great, creative financing options buyers may use to purchase a home. One of these options is the FHA 203K loan.
The FHA 203K loan is a little different from other financing programs. Specifically, this loan program is designed to help buyers purchase and renovate fixer-upper homes. With the FHA 203K loan, you can apply financing toward some repairs and upgrades, even if you don’t have the cash up front. Typically, we see up to $35,000 financed to cover repairs and expenses.
Let’s say you’re buying a home that needs to be repainted and have a few repairs done. At this point, a contractor who meets FHA standards will visit the property to assess the cost of fixing these issues. So long as the repairs fall within certain parameters, they can be included in the financing for the home loan so that you can begin the projects after closing.
While you cannot use these funds to put in a pool or outdoor entertainment space, the good news is that you can use them on things such as the roof, HVAC, finishing a basement, or a remodel on the kitchen or bathroom.
So long as the repairs fall within certain parameters, they can be included in the financing for the home loan.
The bad news is that this is an expensive way to finance repairs. If you are going to stay in the home for 15 to 20 years, you will be paying for these repairs for just as long. However, if you are only planning on staying in the home for five to 10 years, it is not a bad idea.
If you want more information about how this program works, feel free to call or email me so that I can connect you with one of our preferred lenders. And if you are interested in buying or selling, please do not hesitate to contact me. I look forward to speaking with you soon.
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