Have you ever walked into a house and turned back around because you saw a lime green shag carpet, outdated avocado-colored appliances and a window air conditioning unit?

Did the realtor tell you to forget about it because you can’t get an FHA loan if the property needs repairs?

If your response was “Yes”, then this blog is for you.

For those who still don’t know, FHA offers a loan product that specifically for those issues.  It’s called a 203K Rehab loan.   The 203k, as it’s affectionately known, enables a buyer to purchase a home that needs repairs by rolling the cost of the repairs into their mortgage payment. 

There are two versions of the loan.  The 203K-Streamline which is typically used to address less extensive repairs.  For example, the items in the first scenario would be covered.  Buyers can purchase appliances, replace the carpet and install central air with a 203K loan.  

The other version, the 203K-Standard, is ideally suited for major renovations. Adding living area, new roof, re-plumbing, renovating a bathroom or installing a kitchen because the previous owners decided to take their granite counter tops and sub zero refrigerator with them can all be done with a 203K Standard loan.

You can do almost anything with a 203k Rehab loan even fix a leaky pool and landscaping.  

The loan structure is simple too.    Since it is guaranteed by FHA, the minimum down payment is 3.5%.   Buyers can get fixed or adjustable rate mortgages for terms of 15 or 30 yrs.  And the rates, well the rates are phenomenal.  

There are additional fees associated with getting a 203k loan but the down payment is less than 20%.  Additionally, if compared to going to a national retailer to contract the repairs, the mortgage interest rate will be significantly lower than the 21% APR on the credit card account.  Plus there is no prepayment penalty.

Let my expertise show you the possibilities of a fixer upper.  Also, if you recently purchased your primary residence with cash, you may be eligible to refinance the repairs with a 203K loan. (Certain restrictions apply.)

You may contact me directly for more information.  I look forward to your comments and questions.

JACQUELINE CLARKE
FHA Rehab Loan Specialist
Freedom Mortgage Corp.
Winter Park, FL 32789
Cell: 407-591-7693

Email: J_L_CLARKE@YAHOO.COM