Money to Renovate Comes with this Mortgage
Posted February 10, 2019 in Real Estate Trends
There’s a new mortgage program for first time home buyers looking to be owner-occupants of homes needing improvements. It’s available through your mortgage lender working with the FHA. FHA Section 203(k) loans offer a solution that helps borrowers achieve a single, long term, fixed or adjustable rate loan insured even before the condition and value of the property may offer adequate security regarding the loan. The cost of improvements is calculated into one loan or mortgage.
With entry-level, new construction homes becoming scarce in many neighborhoods, existing homes can become a great option for first-time homebuyers. With Section 203(k), it makes sense to purchase a fixer-upper that is either outdated or in need of repair since the loan includes the money to make the improvements.
The types of improvements that borrowers may make using Section 203(k) financing include:
- Structural alterations and reconstruction
- Modernization and improvements to the home’s function
- Elimination of health and safety hazards
- Changes that improve appearance and eliminate obsolescence
- Reconditioning or replacing plumbing; installing a well and/or septic system
- Adding or replacing roofing, gutters, and downspouts
- Adding or replacing floors and/or floor treatments
- Major landscape work and site improvements
- Enhancing accessibility for a disabled person
- Making energy conservation improvements
The loan includes help through a HUD consultant who helps the homeowner with improvement bids and oversight of the inspection work. The down payment may be as minimal as 3 or 5 percent of the cost of the home depending on a number of factors associated with the homebuyer such as credit score.
Applications must be submitted through an FHA approved lender. Want to know the specifics of a 203)(k) loan for you or what you can do to get qualified? Please email me at MPattullo@PeakMtg.com
We lend where we live,
Mortgage Advisor • MLO# 229675 • Peakmtgnw.com