Many homes for sale these days are owned by a "bank", properties that were taken back by the lender for non-payment. With their "floors of attorneys" it is natural that the banks are to be protected when they sell their assets. As such, when you buy a bank-owned property it is As-Is ... no disclosure, no repairs, no liability for condition of the home. That is understandable as they have no knowledge of the specific property, but the very nature of their situation and ownership has worked against them.
When a bank takes over a property they immediately turn off the utilities and "winterize" the home. In the summer this "winterizing" process leads to the demise of the landscaping ... no water and the plants can't grow. As the prior owners weren't making their payments it is often the case that they couldn't afford to keep up the property maintenance. Paint, carpet, windows and more are often required with such properties. This type of property is really price right these days so how do you buy one with a minimum down if it needs substantial repairs in addition to the acquisition cost?
The FHA 203k Streamline is, perhaps, your means to owning such a property and enjoying it in a rehabilitated state. With this loan program you can have up to $35,000 set aside for repairs as a part of your loan. Acceptable repairs can include remodeling kitchen and bathrooms, new exterior work like stucco, replacing plumbing fixtures, new flooring and roofing, and major landscaping improvements. If you can demonstrate the ability you can "self-help", government talk for doing it yourself. If you are hiring a contractor it is a good idea to get him on the job before you venture to get his ideas on what can be done and at what cost.
The loan can be used to refinance and rehabilitate as well as for a purchase. It is only for owner-occupied properties, though it can be used for up to a four-plex provided the owner lives in one unit. Manufactured homes in accordance with HUD guidelines qualify, and you can even move a home from one lot to another. Safety code violations must be corrected and energy conservation standards met while no luxury improvements as defined by HUD are allowed.
Our Advice: The FHA 203K or the FHA 203K Streamline could be the means for letting you buy a home and making it your dream home with the needed repairs and alterations. The criteria differs between them. Talk to a Lending Professional about these programs and how you can get preapproved to go shopping in the bank-owned arena of properties. Your lender will detail the specifics of the loan and the mechanics for implementing it for you. The down payment is minimal and the rewards many.
Don't be lamenting from the sidelines in this market. The FHA 203K program can help you buy a diamond in the rough and shine it up all at a great price with one loan. It's worth a phone call to see how it could work for you. Don't experiment with lenders ... if you don't know one ask your real estate agent for the names of reputable lenders that can help you. Get your Agent, Contractor and Lender working together and you will undoubtedly have a winning combination with you being the Victor! When it comes to choosing professionals to assist you with your real estate needs... Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. carsonvalleyland@hotmail.com, www.carsonvalleyland.com
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