Hi, Marie

Your best option is a FHA 203BK (Baby K). This is the scaled verision of a 203 K that allows up to 35K in repairs and renovations that do not included tearing down interior walls and reconfiguring the original layout of the home. The other benefits of the 203BK are as follows:
- Less time consuming than a 203K, since it requires only a single bid from a FHA approved contractor
- Can still close within 30 days since the repairs/renovations are typically done afterwards
- Allows you to roll the repairs costs on top of your mortgage, foregoing the additional wait, reapproval process, and additonal closing costs of a 2nd mortgage or HELOC.
- Unlike a HELOC, you can claim it on your taxes
- The interest wait is typically only 1-2 precent higher than a standard FHA 30 yr fixed loan
- If rates are favorable enough, you can also still utilize your FHA Streamline Entitlement within 6 months to reduce your interest rate thereafter and save you again the additonal time, paperwork, and expense of a standard refinance.
Hope this Helps.

Conventional? Aunt Bertha and Uncle Bob...just kidding. Before purchasing the house, check to see if there are any credit unions or banks in the local area that will give you a second mortgage to repair the home. You may also get the bank or seller to make any major repairs before you buy (using the inspection as proof of the repair to be done). I understand some homes are not FHA HUD homes and you have to go conventional, however, there are a gazillion homes just like that for sale where you can use the 203k loan. And I understand that if you have an FHA already, you may not qualify for another. Unlike Mr. Lerette, I will charge you out the wazoo for a 203k loan because they are time consuming and can take up to 6 months to complete. There are also HUD foreclosed properties that only require $100 down. The bank will repair up to $5000 and pay up to 3% of your closing costs. This is an FHA loan. There are lenders that will allow you to roll in the remaining balance of escrows and closing costs (and no, I won't charge out the wazoo for a loan).

Hello Marie,

There are a few options you have. You can do a escrow hold back with the seller paying for these discovered repairs or you can utilize the FHA 203k. It is a very simple loan that allows you to finance the $10k in repairs under one loan. If your lender can not offer the loan, feel free to contact me at any time. Our rates are exceptional for FHA and conventional. Conventional at 4.75% with no points and 4.875% with no points for FHA. Have a great evening.

Joshua Lerette - The Tampa Bay Mortgage Pro
Innovative Mortgage
727-488-7355
josh@thetbmortgagepro.com

Look into a 203K loan. This is a loan designed to help with repair costs. Ask your lender about it to see if you qualify.