There is a group in our area that works on property swaps, although I'd have to research how active they are right now. The cleanest way is to get a home equity line of credit on your fix up home, to use as down payment on your new home. Still, there are more questions to ask you to give you the best direction on this one.

For example, are you living in the fix up home or is it rented? On a new purchase, using FHA lending, you need to put down 3%, but even that could be creatively financed.

To solve your problem the answer is not in using your current home as a 'downpayment' without converting equity to cash in some way. But there may be other solutions. I suggest you call to discuss in more detail with myself or one of the other qualified realtors.

Hi Diane,
The chances of finding someone selling the home you want, who also wants a fixer upper, is slim. However you may have other options. Depending on the amount of equity you have in your home, you might be able to refinance it or get a second mortgage, thus giving you the capital you need for a down payment on the home you want to buy. Another choice would be to sell your home as-is. Don't underestimate the amount of buyers looking for handyman specials. Of course this will also depend on your local market. You should contact a local Realtor and have them appraise your home. Good luck.

Hi,

You can't use equity as a down payment unless you get a mortgage to extract that equity. Do you currently have a mortgage on the house that needs fixing up? What is the loan-to-value?

There is also a loan from FHA called a 203k rehab loan. You can use this loan on the house you want to fix up. The lender will lend you the cost to fix up the house and it's a 30 year fixed with good rates.

Warm Regards,

Rob Chomentowski
858-922-7899
Sr. Loan Officer
rob@affinity-financial.com http://www.affinity-financial.com