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 -
Gas Versus Electric – Which is Best? The age old question of gas appliances versus electric appliances has been revived yet again and whether or not you are considering remodeling your kitchen, replacing your furnace or trying to reduce your reliance on fossil fuels, there has never been a better time to really think this issue through....... -
Home Maintenance Given that buying a home is the biggest investment that people make, home maintenance is an important part of owning a home. One hopes that their investment is worth as much as it can be, and to ensure that maintenance has to be done. Preventative maintenance avoids very costly repairs...... -
Using a Home Improvement Video to Guide Your Project Home improvement handymen these days get a lot of their information from the internet. There is nothing wrong with this as there are many sites just like this one that exists to provide people with useful information on the different aspects of home improvement. However, one thing that you need...... -
Budget Fixes For Your House Fixing up the home is a task all of us have on our lists, but they never get done due to high costs for materials and labor. Home improvements do not have to blow the budget, however, and by doing it yourself, you can save even more. Here are seven...... -
3 Simple Ways to Improve Your Home There are a wide variety of different things that you can do to improve your home. There are probably dozens of small steps that could be taken today to enrich the quality of your home. Here are three simple ways to improve your home, which can be accomplished in as......
Related Websites -
Save Time, Money and Space in Over 80 Ways If you're looking for handy gadgets, tools and various items that can save you time, money or space (or all three!) this list of more than 80 top products is just what you need. Everyone's got saving money on their minds these days. Some of us are always looking to...... -
FHA Mortgage Loan Requirements Guide When I was reading Dale Siegel’s The New Rules of Mortgages, was struck by the sheer number of available mortgage options available to Americans. I knew about your standard vanilla varieties (30 year fixed, 15 year fixed), even the trickier ones (ARMs, Option ARMs), but I knew very little about......
-
Some Foreclosures Cannot Be Helped, Says Treasury Dept. I Agree, And Nor Should They Be. Be sure to take the poll about this subject at the end of the post! I just finished reading a recent article about Treasury Secretary Henry Paulson saying that there are many foreclosures that cannot be helped; but I would venture to say that there were even more than he...... -
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...... - Your Home Pays You Back with Reverse Mortgages The follow is a guest post by Tanesha Morgan a writer for Personal Finance Analyst. Personal Finance Analyst is an online community of bloggers dedicated to taking the mystery out of money and helping you to live a happier, more successful life with the money you have. Lately, I have......
- Commercial Real Estate Opportunities
- Manufactured Homes Real Estate Opportunities
- Land Real Estate Opportunities
- Timeshares for Sale Real Estate Opportunities
- 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