Most people are familiar with using an FHA loan to buy a home. If your home and income qualify, it can be one of the most competitive financing products out there.
However, what if you find a beautiful piece of coal that just needs some polishing to become a diamond? It takes cash to mine diamonds and you probably don't want to plunk down everything out of pocket. That's where the FHA 203k loan program comes in handy!
There are other rehab loans on the market but generally they require two loans with relatively high interest rates that can eventually be refinanced at a lower rate when the property is brought back to good condition. For many buyers, this financing is prohibitive because it has very stringent borrower requirements.
Like other FHA loans, HUD requires the property to be single family which in the government's eyes actually means 1-4 units. Generally speaking, average homes and many condos will qualify for the 203k program -- even moving a home to a new lot is sometimes eligible!
Here are three common ways to use a 203k loan:
- To demolish a home or move a home to a new lot.
- To purchase a home and roll rehab costs into the loan.
- To refinance an existing loan and get more money out to finance repairs.
Officially, you can't finance "luxury items" with loan proceeds. You can finance all costs of necessary improvements though, including but not limited to additions, painting and trim work, decks, and energy related improvements.
Overall, the FHA's 203k loan program is a great way to buy a fixer upper, with minimum cash out of pocket, and earn some sweet equity buy doing repairs on your own. I highly recommend looking into it if you're considering purchasing a home that needs more than a few repairs.
This guest post was written by Brandon Laughridge of Mortgage Loan Place. MLP specializes in educating consumers about every type of home loan. Check out the Mortgage Loan blog for up-to-date commentary on the mortgage market.
Photo Credits: Hammer51012
Originally posted 2009-06-24 19:35:47. Republished by Blog Post Promoter
Related Posts -
Choose the Right Home Smoke Detector A home smoke detector or smoke alarm is the best safety device you can use to protect yourself and your loved ones. Most homes in which a fire breaks out and someone is killed don't have a working home smoke detector. These are inexpensive devices that can save lives. You...... -
6 Great Home Uses for Power Pressure Washers Power pressure washers are handy pieces of equipment for home use, and some models are made for commercial use, as well. Unless you plan on running a pressure washing business, however, you can get away with a relatively inexpensive piece of equipment that can you use to do a large...... -
Basic Home Repair: Home Improvement DVD The Basic Home Repair: Home Improvement DVD is designed to provide complete details and lessons on home repair topics including energy conservation, home security, replacing a faucet, sweating copper pipes, replacing toilets, unclogging drain clogs, replacing the caulk on a tub, replacing lighting fixtures, repairing broken lamps, replacing tiles that...... -
Easy Ways to Increase The Value of Your Home As the housing market continues to struggle, many homeowners are looking into ways to increase the value of their homes. However, a common issue that keeps these homeowners from making improvement is the lack of availability on home improvement loans, and a lack of available funding. Luckily, there are many...... -
Home Improvement Grants for Home Improvement Help If you are seeking out home improvement help, then one of the best things that you can do, at least on the financial side of things, is to get the home improvement help that you need by way of home improvement grants. If you are looking to sell your home......
Related Websites -
Introduction to Mortgages pt 1 of 5 The housing market is an interesting beast, because it comes and goes, rises and falls, allows some people to flourish and brings others to ruins. If you want to understand how the housing market works, you should begin with an introduction to home mortgages. This is part one in a...... -
One in Six Underwater Homeowners Can't Refinance at Historically Low Mortgage Rates Seems Mr. Bernanke and The Federal Reserve are hellbent on lowering mortgage lending rates after lowering short term rates to zero this week. Problem is, 1 in 6 homeowners are underwater (owing more than the home is worth) on their mortgage, and will not have a chance to refinance to...... - To Negotiate Properly In Real Estate Arrange Financing Prior by Walter U. Pipko Seriously in the market for a new home. In many real estate markets dwelling, land and property prices are in a slump. Its a good time for dealing on the real estate market . Its seriously a buyer's market. But that is only if you prepare......
-
How to Get Out of Trouble in the Real Estate Market If you invested in the real estate market recently and are now regretting that decision, there are a few ways that you can get out of financial trouble. For awhile, the real estate market was very solid and property values were going up. Many experts advised investing heavily in real...... - What You Need to Know About Manufactured Home Loans and Mortgages by Dennis Luyen Today, more than ever, people are buying manufactured and mobile homes. You will save money by buying a premade home, since significant time is saved on construction. Even if they're not going to be moving their mobile home, the previous reasons are why more and more people......
- Land Real Estate Opportunities
- Commercial Real Estate Opportunities
- Manufactured Homes Real Estate Opportunities
- Timeshares for Sale Real Estate Opportunities
- Residential Real Estate Opportunities
Categories:
Finances, Guest Blogger, Handy Man, Project, Real Estate
Tags:
1 comment so far ↓
Get the Biggest Bang for your Buck during the credit crunch. Here’s great INFO to share, save and explore. Curb appeal can be achieved at a modest cost and a little exercise!
Leave a Comment