Do you have more repair skills than cash?
If you would like to purchase a home and get a great value, you might be able to get a loan for the home of your dreams with the help of 203(k) rehab loan insurance.
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As long as the After Repair Value (ARV) of the home is MORE than the amount you need to borrow, getting a loan with the help of 203(k) loan insurance might be the way for you to go.
Example:
$25,000 - Home Purchase Cost
$35,000 - Home Rehab Cost
$60,000 TOTAL COST
$125,000 - Home Value AFTER Repairs
Ordinarily, a lender will be concerned about making a loan on a property for more than they can resell the property immediately on today's market, because if the borrower defaults on the loan, the lender has no way of recouping the costs.
However, with the help of 203(k) rehab insurance, the lender is covered for both the initial home purchase price AND the rehab costs, even if the borrower defaults on making payments on the loan.
This is really good for the buyer, also, because it is possible to get more house for the money since many people do not want to buy a home, only to make repairs after moving into it.
This is also good for the neighborhood, also, because it encourages people to buy and fix properties, removing eye sores from the neighborhood.
Of course, there are restrictions, but many people do not realize they can do this, and they can get a lot more home for the money through this (loan insurance) program.
The total loan amount cannot exceed the After Repair Value of the house (the value once repairs are done).
The cost of the rehab must be, at least, $5,000, or it can be as extensive of an entire reconstruction, as long as the existing foundation of the home remains.
For more details, you can visit the US Housing and Urban Development site:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203k--df
If you are a true handyman, this might be a great opportunity for you.
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