Buying a house that needs repairs can be a real Catch-22: the bank won’t lend the money to buy the house until the repairs are made, but you can’t make the repairs until you’ve bought the house.
Before you walk away from the deal, take a look at an FHA 203k Renovation Loan. This special program combines the funds for purchase and renovation into one convenient loan. Once the loan is closed, the renovation funds are held in escrow to pay for renovation work done by approved contractors.
FHA 203k Renovation Loans are available in Standard and Streamlined versions.
The Standard version is intended for homes that require engineering or architectural drawings and inspections. Standard 203k loans are also recommended for homes that need extensive structural repairs, including room additions, exterior grading and landscaping, or any renovation that prohibits you from living in the home until completed.
If your home requires less extensive improvements, or the total renovations and related expenses will not exceed $35,000, consider the Streamline 203k. This loan doesn’t require a consultant, architect, or engineer, and features a lower number of inspections.
For more information about renovation loans, including complete eligibility requirements, contact us today.