Randy...I am going to give you a little different answer to the question...I am a 203K certifed lender in the Atlanta area. Under the terms of the FHA 203K loan, we can actually lend you up to110% of the after improved value of the home to include the proposed renovations. The "value" is the tricky part of that statement because all improvements that you want to do the property will not necessarily equate to a dollar-for-dollar increase in value. The required down payment would be 3.5% of the sales price plus the renovation amount. We allow middle credit scores down to 600 as long as we get a Desktop Underwriting approval. On FHA loans, such as the 203K, we allow the seller to pay closing costs and prepaid items up to 6% of the sales price, so the sales contract could be structured so that you only come up with the 3.5% down as long as the house appraises. By the way, the federal tax credit would come into play when you file your income taxes next year and cannot be applied to your down payment. FHA does allow for a Gift from relatives, however, for the down payment. For more information on 203K lending, please call me at 770-301-0527.

Thanks for all your input, this really helps clarify my options, I'll inquire with my lender specifically. Guess NSP is a really clear example of the "early bird getting the worm"

Randy,

I had a similar question last week on my blog. The blogger inquired about grants for restoring historic homes. The streamline answer is that there are grants available for commercial properties, but not really any for restoring residential properties. There are tax credits though. On my blog you will find a link to grants, loans and tax credits for restoring historic properties in Georgia.

I agree with James about the NSP. I've heard that their is no more money available. The best renovation loan available right now is a 203K loan. There are forgivable grants available through the Atlanta Development Authority but I am not sure if you can use them with a 203K loan. I believe the property has to be in "move in condition." I may be wrong. It's best to talk to a lender who has the expertise of 203K loans and ADA programs.

GOOD LUCK! The link to my blog is below.

There are no more funds available for the Neighborhood Stability Program. Currently, there are over 150 people on the waiting list.

There are many programs out there, but lenders and counties associated with them don't know how to apply the money.

The NSP Grant or Neighborhood Stabilization Program Grant is one of them. To date I know very few lenders who can close this loan because it requires the lender to front the grant money and then get reimbursed. Most buyers, lenders, and Realtors I know would rather bang their head on a brick wall for 2 days than to work through one of these deals. The approval and completion of these loans are slim to none.

The 203K loan is the easiest option. Wells Fargo has a streamlined rehab loan in partnership with Home Depot & Lowes.

If you want some more info. just drop me a line and I will connect you with my Wells Fargo Rep.

You can get an FHA 203k or a conventional renovation loan. Both loan programs require a 620 credit score however the maximum loan to value ratios differ. With the FHA 203k product, the maximum loan amount is 96.5% and the first $5,000 must be spent on major repairs such as electrical, plumbing, flooring, roof or HVAC. With a conventional renovation loan product, the loan to value ratio is 95% however it can be reduced based on the type of property that is being purchased and the location of the property. Unfortunately, there are no grants to assist with renovations. There are grants through the state of Georgia for downpayment assistance however they cannot be used in conjunction with a FHA 203k loan and are used for low to moderate income households.