Do you dream of a new home, but don't quite have the cash for a down payment? Are you willing to exchange sweat for equity? Then the government wants you to buy a fixer-upper home.
If you're handy around the house or enjoy remodeling you are a perfect candidate for a 203K or Rehab Mortgage Program. This unique government mortgage program is an innovative way to interest hardworking people into a new home and save the down payment for home improvements.
The Government Wants You to Rehab Homes
If you're willing to fix up a home that has been neglected or abandoned then the government wants to help you. In fact, the government is so motivated to get these homes off the market that they will help you with a cheap mortgage and require little to no down payment. The government understands that there are literally hundreds of homes, sitting vacant due to foreclosure or homeowners walking away. And they know that housing prices can't go up with these damaged homes sitting vacant.
Many of these homes are not disasters, but simply neglected by owners whom couldn't afford to maintain them for months (maybe even years). The government knows they need to have incentives for handy, hardworking people to patch them up and live in them to recover the housing market. They need people like you to get the economy jump started one home improvement at a time.
203K Loans Require Little or No Down Payment
The home buying incentive is an FHA (Federal Housing Administration) Loan with little to zero down payment. This provides you with an affordable mortgage and money left in your pocket to put into repairing and improving the home.
The really great part is not only are you saving on a down payment, but you are literally and immediately increasing the value of your home. If you have the ability or the capital to fix up your new home this is the best way to buy a home in this market. You get to put your cash and sweat directly into increasing the value of your real estate investment.
How Can I Use a FHA 203K (Rehab) Loan?
You're next question is probably, "How exactly can I use a Rehab Loan?" The good news is there are many ways to use this kind of mortgage to improve a new home or even
- refinance and fix-up your current home.
- To purchase a dwelling and the land on which the dwelling is located and rehabilitate it
- To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it
- To refinance existing indebtedness and rehabilitate a dwelling