203k-Fixer Upper Loans-by FHA

203k-Fixer Upper Loans-by FHA

Funds for Handyman-Specials and Fixer-Uppers

Purchasing a home that needs repair is often a sticky situation, because the bank won't loan you the money to purchase the house until the repairs are finished. But, the repairs can't be done until the house has been purchased. This is where 203k-Fixer Upper Loans come in.

HUD's 203(k) program will help you fixer upper types with this catch 22 situation and allow you to purchase and include in the loan the funs you need to make the repairs and improvements. And like a traditional FHA loan, the down payment requirement for an owner-occupant is approximately 3.5% of the purchase price coupled with the repair costs of the property.

Looking for a fixer upper and want to use the 203k-Fixer upper loans by FHA? Here are the steps you take:

• Select an FHA-approved 203(k) lender before you start shopping. Once you identify a property you like, they and your Realtor will help you put a proposal together for FHA showing the scope of work to be done, including a detailed cost estimate on each repair or improvement of the project.
• You and your FHA Realtor locate a fixer-upper
  property that makes sense for you, your budget and the repairs that need to be done. Your agent will know how to write the offer contingent upon the approval of a 203K Fixer upper loan.
• The appraisal is performed to determine the value of the property after renovation.
• Once the loan closes, it will be for an amount that will cover the purchase price of the property, the remodeling costs and the allowable closing costs. The amount of the loan will also include a contingency reserve of 10% to 20% of the total remodeling costs and is used to cover any extra work not included in the original proposal.*per HUD
• At closing the funds for your remodel are put in an escrow account to pay for the repairs and improvements during the rehab period. *per HUD
• The mortgage payments and remodeling begin after the loan closes. The borrower can decide to have up to six mortgage payments put into the cost of rehabilitation if the property is not going to be occupied during construction, but it cannot exceed the length of time it is estimated to complete the rehab. *per HUD
• Escrowed funds are released to the homeowner during construction through a series of draw requests for work that is completed. To ensure completion of the job, 10% of each draw is held back; this money is paid after the homeowner informs the lender that the work has been completed and after the lender determines there are no additional liens on the property. *per HUDSo “Do It Your Selfers”, interested in the 203k-Fixer Upper Loans for homes that need work? Contact Munson Realty at 877-636-0444 and we’ll help you find the “fixer upper” and provide you with a list of 203k- Fixer Upper Loans specialist.

Copyright © 2011 By Stephen Munson-Munson Realty Southern California Real Estate –203k-Fixer Upper Loans-by FHA*203k,Fixer upper loans, FHA*