You might be able to get closer than you think! Obviously, the cat is out of the bag on the whole “astonishingly low home prices” thing. BUT, many buyers in the market today are still finding that it’s difficult to find a home that is both move-in ready and affordable. This is an especially difficult hurtle to cross if the buyer needs to utilize FHA financing as FHA has several guidelines in place that limit the maximum amount of repairs a potential property can need in order to be eligible for FHA financing which essentially require the property to be “move-in ready” as-is.
THERE MAY BE A SOLUTION! 203K Financing is an FHA program which allows you to finance repairs and improvements on a property at time of purchase. For example, if you fall in love with a property that is $15,000 in necessary repairs short of being eligible for FHA financing that is listed for $100,000, you may be able to purchase that home via a 203K financed loan in the amount of $115,000. The bank will require you to obtain at least two bids for all of the repairs/improvements you want completed and then order an appraisal “subject-to” those repairs. As long as the projected value of the home after the repairs are completed is equal-to or greater-than the loan amount, and the buyers qualify for the loan, you should be in a pretty good spot.
If you have questions, feel free to call me directly or go online to HUD.gov and research the program on your own.
From the first time home buyer to the savvy investor – from the seller with equity to the seller underwater and needing options – I am here for you.