How about getting a great deal on a bank owned property and getting a loan for the property and all the repairs!
I don't know how the market is where you live, but here most of our listings are bank owned property (REO's) and it's difficult to get one for a home owner that will be using for the home for their primary residence and having it qualify for financing. The shape of most of these REO's are so bad they won't pass a FHA appraisal without fixing everything first. So the buyer is not only competing with all these investors for the great deals, but they have to find a property that is in good shape which of course will add to the competition. On top of that they have to use financing to purchase and that could be a disadvantage when competing with so many cash buyers.
Well along comes the FHA 203K loan and with it opportunities for the real home owner to get a great deal on these bank owned properties. With the FHA 203K the borrower can obtain a loan for the price of the home as well as the repair costs and the repairs are done within 6 months of the closing date. The appraisal just has to come out at "as repaired value" and they will lend up to 110% of that value. This keeps the new buyer from getting in more debt to cover the repairs and include the cost in the mortgage which also will help on taxes. Below are some of the advantages:
•· Will close "As-Is"
•· No repairs needed to close.
•· No Termite completion... OK
•· No Kitchen...OK
•· No Bathroom...OK
•· Cracked Slab...OK
•· Fire Damaged...OK
•· Well & Septic work needed...OK
•· Code Violations... OK
•· Ability to customize and modernize the home
•· Finance up to 6 mos. mortgage payments while the house is being remodeled
•· Easier FHA qualifying guidelines.
•· Brings them into the market on distressed "as-is" listings
•· Property tax based on Purchase price
All in all this program give the person looking to get a great deal in this buyers market a chance and to bring that home up to the standards that they want to live in. We have even seen these loans being used for Chinese drywall homes. Again this is just for the buyer who is planning on living in the home as their primary residence and would not be available to investors. I hope more buyers become aware of these loans to help get some of this inventory off the market.
Watch a Video on the FHA 203K Loan and How it works Types of FHA loans
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