Financing your fixer upper
By Don O’Dell (Senior Mortgage Consultant)
Whether it’s a foreclosure, a short-sell or a home neglected by a cash-strapped owner, homes that need work are often a smart buy.
But how do you finance the fix-up on your fixer-upper?
Consider an FHA 203(k) Loan. This renovation/rehab loan program combines a traditional home mortgage with a home repair loan, giving you the flexibility to buy a property that needs repair and fold the cost of those repairs into a single mortgage.
With a Streamline 203(k) loan, you can borrow up to $35,000 for improvements such as repair/replacement of roofs, flooring, siding and windows; electrical, plumbing, painting, weatherization, basement finishing and appliances. You can even use the money to improve energy efficiency or to make a home accessible for a disabled person.
Work must begin within 30 days of closing and be completed within six months. Funds are placed in escrow and contractors are paid as the work is completed.
To get the most from your 203(k), it’s important to find the right property as well as a Realtor who knows and understands the program. At Allen Tate Mortgage, we’ll help you navigate the renovation loan process and turn that fixer-upper into your dream home.
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