Home Buying in Fort Meade>Question Details

Tonya Rister, Home Buyer in Fort Meade, MD

So many homes I am looking at need work. Am I allowed to take more out on my loan to pay for these expenses, lets say in the case of a?

Asked by Tonya Rister, Fort Meade, MD Thu Sep 20, 2012

"as-is" home. Or are repairs up to me?

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Answers

9
Jessica Hood & Laura Roskelly’s answer
Hi Tonya,

Yes there is a loan called an FHA 203k that you can use to finance both the home purchase and repairs OR improvements like granite countertops, hardwood floors, etc. The downpayment on this loan is 3.5%. I see you mention Fort Meade, if you are using a VA loan there is no such program. I sure wish they would come out with that option for vA lona users. If you need great advice and assistance with purchasing contact our team of pros at.

With as-is homes all repairs are the buyers responsibility.

http://www.FortMeadeAreaHomes.com.
0 votes Thank Flag Link Thu Sep 20, 2012
Good Evening, yes, the answer is yes, depending upon your credit. There is an FHA loan, called a 203K, which wraps renovation, up to certain levels, into the mortgage. Conventional loans also have a renovation mortgage. I can help you in finding you a home, as well as refer you to good lenders who deal with those types of loans.

Let me know..
ruth.popek@century21.com
0 votes Thank Flag Link Tue Nov 12, 2013
Good morning Tonya,

Yes, there is an FHA program that allows you to borrow the money you need to buy the home and include the cost of repairs so you'll have ONE loan with ONE monthly mortgage payment.

The Miracle Rehabilitation Loan Known as the FHA 203k Loan

This miracle program allows a Buyer to purchase a home and obtain the monies for repairs or home improvements all rolled into a single loan with a SINGLE monthly FIXED RATE payment. The repairs can cost as little as $5,000 or can run as high as necessary to fully gut-renovate a home.

The limit on the repair monies included in the loan is the Loan-To-Value (LTV) Limit based on statutory FHA Loan Limits in your area (see below). And this LTV percentage is calculated based on the value of the house AFTER improvements.

The 203k program even has a provision allowing the Buyer to request that up to 6 months worth of mortgage payments be included in the loan so they don’t have to pay two monthly housing
expenses—rent and mortgage—while the house is under construction.

With more and more bank-owned “REO” properties offered for sale, Buyers need the 203k
Program more than ever before.

203k Interest rates run higher than market, but this is still an ideal program to help Buyers achieve their goals of homeownership while simultaneously updating or renovating a home for the lowest possible cost.

Highlights of the 203k Program:

•Buyer can obtain the cash needed to conduct improvements on a home
•purchase folded into the same mortgage loan needed to purchase the house.
•Borrower must qualify according to regular FHA Underwriting criteria with regards to Income, Assets and Credit.
•The Program is only open to Owner-Occupants; no investors permitted. BUT you do NOT have to be a First-Time Homebuyer.
•No Income Limits; no minimum income requirements. No geographic limitations, with the exception that the property is here in the good ol’ USA!
•Purchase + Improvements = ONE Mortgage and ONE Monthly Payment

There you have a good fundamental look at the miracle program known as FHA 203k.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Thu Sep 20, 2012
Very smart decision on your part, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Thu Sep 20, 2012
Thank you all very much! I have heard of this renovation loan. But, I think we might just stir clear of the "as-is" homes. There are just so many homes with soo much potential and people have just let them go to the way-side. I appreciate everyones answers.
0 votes Thank Flag Link Thu Sep 20, 2012
You can do a couple of things. If the repairs are 'health and safety hazards' you may be able to negotiate a credit from the owners to pay for the repairs. You can ask the current owners to have the repairs done, though that is not something I would recommend. If I were the buyer I would want to have the repairs done myself so I know the quality of the work. If it's a short sale, or a bank foreclosure, you need to take the cost of repairs into consideration when making your offer because the bank will not do any repairs of any sort, at least in general, you can try but I haven't heard very many success stories. If you don't have the money to do the repairs, you can consider getting a renovation loan, an FHA 203K loan. Those loans allow you to borrow both the purchase price of the home and money to have the repairs done. It's a great option.
0 votes Thank Flag Link Thu Sep 20, 2012
Tonya,

In most cases, purchasing a home "as is," means exactly that, the sellers will not complete any repairs. Your agent and lender can discuss an FHA 203K loan. This loan does allow you to borrow more than the purchase price, if the house appraises for the additional money. You must use licensed contractors to complete the repairs. Talk to your agent and lender...they can help.

Rich Iarossi
Long and Foster
0 votes Thank Flag Link Thu Sep 20, 2012
Typically repairs are up to you unless you get an FHA 203K loan which would give you some additional money (along with many rules to adhere to) to repair your home. This is a specialty loan product and not every lender handles them but I'm sure there are some who do in your area.

You're obviously looking at foreclosure properties, and honestly as someone who helps at least 10-15 buyers a year purchase foreclosure properties, I hope you'll read the article I posted below. Trust me Foreclosures are rarely a great deal. Most are a fair deal at best after doing all the repairs/improvements necessary. It's often easier to buy a better home that's not being sold as-is.
0 votes Thank Flag Link Thu Sep 20, 2012
Typically repairs are up to you unless you get an FHA 203K loan which would give you some additional money (along with many rules to adhere to) to repair your home. This is a specialty loan product and not every lender handles them but I'm sure there are some who do in your area.

You're obviously looking at foreclosure properties, and honestly as someone who helps at least 10-15 buyers a year purchase foreclosure properties, I hope you'll read the article I posted below. Trust me Foreclosures are rarely a great deal. Most are a fair deal at best after doing all the repairs/improvements necessary. It's often easier to buy a better home that's not being sold as-is.
0 votes Thank Flag Link Thu Sep 20, 2012
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