For many years the FHA has offered a construction loan that allows a homebuyer to purchase and rehab a home all in one loan. It's called the FHA 203K loan and this year with a record number of foreclosures expected, it's back in the spotlight. Most Bank Owned Properties are sold in "as-is" condition and as a result c...onventional banks aren't interested in offering financing on a home that will require many thousands of dollars of work to bring it up to code.
The 203K Rehab loan allows the homebuyer(many of which are first-timers) to finance the purchase of the home and at the same time the construction funds are put into an escrow account and disbursed to the contractor as the work progresses.
It's a great vehicle for a homebuyer to purchase an older, undervalued home and modernize it all at the same time. Many of these homes have been vacant for some time and are in need of basic items such as roofing, windows, siding, bathroom and kitchen upgrades, and plumbing and electrical upgrades. The 203K loan is also a perfect vehicle to increase the energy efficiency of an older home, thus lowering the monthly utility bills and increasing the homes resale value.
For much more information contact us at Silex Financial Group or visit the HUD website by using this link: http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
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