Don’t Forget about FHA Renovation Loans for Those “Challenging” Properties
As a Roseville mortgage originator, I cringe a little when I see "property to be sold as is" in a listing. We all know this means the property holder, typically a bank or government entity, will not pay for any repairs to the property. That's fine, as long as you get a cash buyer; lenders do not want to finance properties with "issues", particularly Section 1s. So a distressed property will languish on the market because there are no cash buyers and no bank will finance it.
Or...
Building booms in decades past translates to a large volume of homes needing updating. Let's say a home from the 70s is for sale in a city with a large volume of homes that are fairly new. Buyers will most often gravitate toward the newer homes. The older homes become difficult to sell.
Don't forget about the FHA 203k Streamline loan.
Recap--the 203k Streamline combines the purchase of an owner-occupied home along with the costs of the improvements and repairs into a single loan. The loan amount is based on the value of the home AFTER improvements.
Items that can be included in a 203k include: roofs, gutters, downspouts, heating and air conditioning, flooring, plumbing, electrical, paint (including lead abatement), appliances, windows, doors, accessibility for disabled persons, basement waterproofing, mold abatement, termite infestation treatment, connection to public water or sewer, and septic or well systems.
This loan cannot be used for swimming pools, driveways, sidewalks, landscaping, structural damage, room additions, or major remodeling.
One of the benefits of this program is that the buyer gets to renovate the home according to their preferences.
Very few buyers know about the renovation loan so be sure to educate them about this option!
Here is a brief overview of the 203(k) Streamline program!
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