As the next part of my continuing series of affordable loan options for first time buyers here in the LA & Ventura counties, I want to now present FHA's 203k loan program as a viable option for first time buyers looking in buy an REO property. 

I don't know what the REO's look like in other markets across the country but here in LA and Ventura counties, many of the bank owned properties are too rundown and simply uninhabitable to qualify for a standard 203b FHA loan.  The FHA 203k loan program is a first time buyer's only option if they are interested in purchasing one of these properties.  With an FHA 203k loan, a first time buyer can turn that dumpy and dilapidated house into a really lovely home. 

FHA offers two different kinds of 203k programs:  a) the streamlined program that allows up to 35k in repairs and/or upgrades and b) the standard program that has no maximum loan amount other than the county's FHA maximum loan amount.  Some of the repairs that can be financed with a 203k loan program are as follows:

• Changes for improved functions and modernization
• Elimination of health/safety hazards
• Changes for aesthetic appeal
• Plumbing, heating/air conditioning, and electrical upgrades
• Well and/or septic repairs
• Roofing, gutters and downspouts
• Flooring, tiling and carpeting
• Energy conservation improvements
• Major landscape work and site improvement 

The FHA 203(k) program will finance both the purchase price and the renovation costs of a property.  The mortgage amount is based on the projected value of the property with the work completed (taking into account the cost of the work).  All this basically means is that you can buy the property and fix it up with one loan. 

In addition to meeting the requirements of standard FHA guidelines, there are also a few inspection and appraisal procedures you must follow, for example, meeting with FHA approved inspectors and appraisers to determine the scope of work to be done as well as obtaining contractor bids for the project.  

This is post is just the second in my series of affordable loan options available to first time buyers here in LA & Ventura counties.  Check back for the next post in the series where I address down payment assistance that is available to low-medium income first time buyers here LA & Ventura counties.  Until then, check out my other posts on affordable home loan options here in LA & Ventura counties.

FIRST TIME BUYER OPTIONS IN LOS ANGELES & VENTURA COUNTIES - Part 1: FHA is the Best Option for First Time Buyers

FIRST TIME BUYER OPTIONS IN LOS ANGELES & VENTURA COUNTIES - PART 3: Down Payment Assistance Bridges the Gap to Homeownership

FIRST TIME BUYER OPTIONS IN LOS ANGELES & VENTURA COUNTIES - PART 4: 100% Financing Still Exists for Some Buyers

If you're interested in purchasing your first home here in LA or Ventura counties, contact me about affordable home loan options that you may be eligible for.