Home Buying in Southfield>Question Details

Msusa07, Home Buyer in Farmington Hills, MI

If I get a FHA loan approval for 100,000 and buy a house for 80,000 can I use the rest of the money for home repairs?

Asked by Msusa07, Farmington Hills, MI Thu Oct 27, 2011

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5
BEST ANSWER
To be blunt, NO!! You could however do a 203K rehabilitation loan as long as the home appraises for the purchase price plus the repairs.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
2 votes Thank Flag Link Thu Oct 27, 2011
In order to get a mortgage loan for a house the Lenders always order an appraisal to stipulated the market value of that property and that is the only amount that they will lend you. Now is another mortgage that is called 203K that allows you to get some extra money for repairs, as long as, again the property that you are buying appraises for that full amount including the repair's money.

Best of Luck,

Maria Cipollone

http://www.Flahomespecialist.com
1 vote Thank Flag Link Sat Oct 27, 2012
I don't believe so....the amount actually loaned will be based on the purchase price of the home, not what you are approved for....it's the lesser of the two figures
1 vote Thank Flag Link Thu Oct 27, 2011
Msusa07,

When doing a 203k the money for repairs will be added into your mortgage amount but inquire if you will have to pay a higher interest rate.


good luck
0 votes Thank Flag Link Sat Oct 29, 2011
Msusa07,

Karen's answer is a great one. In the case of a purchase money loan (which is what you're talking about here), you can borrow up to a certain percentage of the lesser of the purchase price or the appraised value. So for example, if you are qualified for $100K on an FHA loan and we know that the FHA permits as high as a 96.5% loan-to-value (LTV), then you can qualify for a house priced or appraised at $103,627. However, if the house appraises or sells for $80K, and you get a max LTV FHA loan on it, then the most you can borrow is $77,200 (unless you qualify for an FHA 203k).

Hope this helps!

Rob Spinosa
rspinosa@rpm-mtg.com
0 votes Thank Flag Link Fri Oct 28, 2011
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