Now you can buy that piece-of-junk home...and fix it up (even get new appliances)...all with the same loan!
It’s called the Streamlined 203K Loan.
The Federal Housing Administration (FHA)has had this program available for awhile, but no lenders would fund it. Now, we are seeing some lenders allow it through the doors.
Basically it works like this:
You go and get preapproved for a loan. $100,000 they say. You find this home that you really like – foreclosed on, needs a lot of work. And it’s only $50,000. But FHA won’t finance the home because there is some plumbing damage, the living room carpet has been shanghaied, and the roof is leaking. The bank that owns the property ain’t gonna fix it. Previously you were doomed to cash or nothing.
BUT enter Mr. Streamlined 203K. (Need to make a logo for a T-shirt)
This program will allow you to purchase the home and loan you up to $30,000 for simple, non-structural repairs. Once the lender approves the loan and the bids, you close on the home and have 6 months to complete the repairs – which must start within 30 days after closing.
Allowed improvements and repairs are things like:
- Roofs and gutters
- Heating and Cooling
- Minor kitchen and bath remodels
- Windows and doors
- Septic or well symptoms
- Decks, patios and porches
- New kitchen appliances or washer/dryer
- And more…
So you can see the potential of this program to buy homes sold as-is that would normally only allow a cash buyer, and open it up to…well, the rest or us.
However, this program will NOT allow for:
- Moving load bearing walls
- Structural issues
- Room additions or add-ons
Sorry, investors, but the program will only work if you plan on making it your primary residence...
And of course there are rules and regulations about who is to do the work and getting bids to get the work done (have to select a licensed contractor for the lender to approve).
It may take a few more days to close than a normal loan to get bids and approvals, but the opportunity to get into a home and make it almost new again are huge!
Call me or a local lender for more details. Pass it on to your friends! Here to Help!
Prudential Kahler REALTORS(r)