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Buyer Loves the Neighborhood, But the House Needs Work! FHA 203K Mortgage!

By
Real Estate Broker/Owner with Mary Schurr Realty

Buyer Loves the Neighborhood, But the House Needs Work! We have heard that a few times. There are so many homes on the market, but not all of them work for every buyer.  Many sellers cannot afford to make changes, updates, or repairs. But, some of these homes for sale could work with a few changes. New carpet, paint, tile, or hardwoods? Maybe, the home needs a lot more such as a total Kitchen or Master Bath renovation? But, the buyer does not have enough money to pay for the changes, closing costs, and down payment out of pocket. This is where the FHA 203K Mortgage comes in!

There are two types of 203 K mortgages-the Standard and the Streamline. Here are a few of the differences.

                                                      203K Standard vs Streamline

                                                                                            
All of the work has to be completed within 6 months of closing, but the buyer funds the work through their 203K mortgage. Loan limits depend on your area, but can run as high as $729,750 (Charlotte, NC is $303,750). There are energy efficient changes that will allow the loan limits to be higher for their value, too. The appraisal is completed with the value of the home after renovations. Owners must use the home as primary residence for one year. Those are just a few of the requirements and options.

This would certainly help remove some of the more challenging listings off the market. For those buyers that find the home in the right location, but just need another bathroom or to expand a Master Bedroom; this could be the answer. As a real estate agent I am aware of many of the features of the 203K Loan, but this could turn into a very long blog! Your mortgage representative will be the true expert for the details of this loan. It can be a complicated process, but for some buyers AND some sellers it could be very worthwhile.

Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Mary, this is great information. I had not heard of the Streamlined 203K version. Good to know!

May 27, 2011 03:48 AM
Mary Schurr
Mary Schurr Realty - Charlotte, NC
Realtor - Charlotte NC

Thanks, Connie! It can work for a lot of buyers and help a lot of sellers sell their home.

May 27, 2011 09:39 AM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Mary I like the way you laid this out; it is easy to see the difference between th estandard 203k and the streamline.

Jun 17, 2011 05:04 PM
Mary Schurr
Mary Schurr Realty - Charlotte, NC
Realtor - Charlotte NC

Thanks, Jennifer. There is a big difference. There is something for everyone.

Jun 17, 2011 05:19 PM