Wednesday, November 9, 2011

203K Loans - The Quicker Fixer Upper!

203K loans ROCK! If Fannie Mae and Freddie Mac could do what FHA is doing, and has been doing for many years, then maybe they wouldn't be in so much trouble! So many of the homes on the market right now that are foreclosed or a short-sale need lots of fixing up. Okay, well maybe not a LOT, but they at least need some new carpet, a fresh coat of paint, and some appliances in the kitchen! Welcome the 203K Home Improvement Loan from FHA.

Some may think this is a new program, but in fact it has been around for many years. It lost it's popularity for some time, especially during the housing boom. Many lenders are finally bringing it back...even though it never went away.

There are two kinds of 203K loans: the regular and the streamline. The streamline is the most common right now. It allows up to $35 thousand in extra funds after closing to fix up the home that you are buying. There are only a few conditions: The home must appraise in the "after improved value" and the funds cannot be used to make structural fixes or changes. The funds can be used for items like new carpet, new paint, new appliances, new windows, fix/install HVAC, fix/install lighting, and so much more!

So now when you are looking at a house that has "good bones," picture it with all the fixings. The loan only takes a few extra steps, but well worth the extra effort to be able to make your new house your new home!

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