Thursday, May 26, 2011

Can I borrow more money than the purchase price of the home to make repairs?

This is the most common question I get from buyers today. The answer is YES!! There is a loan program called the 203K Streamline Loan. This loan is designed for the FHA buyer in mind. If you are looking at properties that are distressed and in need of repair than this loan is an option for you. FHA's Streamlined 203(k) program permits home buyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this new product, home buyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

Luxury items and improvements are not eligible as a cost rehabilitation. However, the homeowner can use the 203(k) program to finance such items as painting, room additions, decks and other items even if the home does not need any other improvements.

This program was designed to let the FHA buyers buy homes that are in need of repairs without the worries of a complicated loan program. This loan offers low interest rates, little down payment options, and 30 year fixed rates!

-Owner Occupants Only
-There must be a minimum of $5,000 in repairs needed
-The work must be completed 30 days after an executed agreement
-Single Family Homes and one to four unit dwellings are eligible
- HUD Homes are allowed. However, the property must be advertised that it is eligible for financing with a 203(k) loan

To see if you and the home you are looking at are eligible for this program call Raub Warner at The State Bank (614) 571-0626. If you are in the beginning stages of owning a home and this program sounds like something you are interested in, Please contact me at (614) 581-2086. I will send you a FREE list of eligible homes!

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