I don’t need to tell you that there are a record number of short sales and foreclosures on the market today or that home buyers are struggling to qualify for those properties.
Whether it’s due to repairs, a lack of cash or the down payment required on typical renovation programs, many home buyers find these distressed properties out of reach.
What most home buyers are not familiar with is an underused FHA program called the 203k. Now before you run screaming out of the room, let me give you a few words of encouragement.
The FHA 203k has gotten easier…lots easier!
For those agents that decide to dive in and take advantage of this program, the opportunities are limitless! Let me explain.
What is an FHA 203k?
The FHA 203k is a fixer-upper program that offers home buyers the ability to add the cost of repairs into the price of their home. Imagine if you could give your clients the option of not having to settle for less or buying a home that they’re less than thrilled about. What if you could help them purchase what will become their dream home without breaking the bank?
Benefits of the FHA 203k
- One closing, one loan and repairs can begin
- Appraisal is based on the value of the home after the repairs are complete
- Down payment is 3.5% and can be a gift from a family member
- Flexible credit options with a 620-640 FICO required dependent on the
- The seller can contribute up to 6% of the closing costs
Eligible Repairs Includes:
- Roofing, Gutters, Downspouts
- Interior / Exterior Paint
- Update Appliances
- Flooring – Tiling/ Carpeting
- Repair, Replace, or add Decks, Patios, and Porches
- Modernize Plumbing, Heating, AC, and Electrical Systems
- Weatherization- Storm Windows, Doors, Insulation and Stripping
- Accessibility Improvements
- Basement Finishing, Remodeling and Waterproofing
Believe me; the 203k program can be your ticket to closing more deals! While your competition is still moaning about how hard an FHA 203k is, you can learn the program, get a system in place and be ready to roll when your next client asks – “Can I borrow money for repairs?” You will be prepared to say “this home has a lot of potential and I know just the program for you!”
Educate, empower and seize this opportunity!
If you have more questions, read through HUD's FHA 203k Q & A
For all of the details, visit HUD's website
Rehab Reboot | The FHA 203k Just Got Easier was written by Rebekah Radice.