Word of The Week: FHA 203(k)
When buying a distressed property like a Foreclosure or Short Sale, you may have limited options for what type of financing you can use. The main reason many homes can’t use regular FHA or Conventional financing is because the property may be without plumbing, electric, or other living essentials. These “typical” types of financing require homes to be fully livable in order to close the loan when you buy the property and take ownership.
For most first time home buyers, FHA is going to be their only option when buying a property because of the low down payment amount and the competitive interest rates.
It’s a common scenario amongst MN Buyers today that their financing will not allow them to purchase a home. So how can you work around this fixer-upper roadblock? Easy: by taking advatnage of the FHA 203(k) Rehab Loan Program.
What this program essentially does is allow a buyer to purchase a property which may have “essential living issues” such as the problems named above. They are able to close the home purchase with the seller, then begin rehab work after closing and roll the costs of the improvements into the end loan.
There are two different types of FHA 203k loans available, a streamline version and regular version. I have attached a PDF here that you can save or print with all the information you need on these loan programs. Click Below for the File:
FHA 203(k) Loan
If you’d like to see if you’re eligible for this or any other loan program, contact me.
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[...] called the FHA 203K loan. A little background first on where the mortgage market is now. Most buyers are using FHA [...]