Need a Fixer UPPer Loan? Then You Need a FHA 203K Loan
You don't hear about it very often but the FHA 203K Loan has been around since the 1970's. The reason you don't hear about it very often is either because the borrower is dealing with an in-experienced loan officer who just don't know about it, or doesn't want to make extra work for himself during the time of the close. It's an amazing loan and it's all I do here in this beautiful state of Colorado.
You can either do a PURCHASE or REFINANCE with this loan and here's how it works:
It's simple, all you do is roll in the comprehensive repairs that are to be completed by the general contractor and subs in to your loan amount.
If you want to add any additional square footage to your home such as adding a garage, bedroom, bathroom, deck, or new kitchen, it can all me rolled in to the same interest rate. Whether your remodeling one room or the entire home with multiple jobs it can all be done with the same contractor and same interest rate which is now only between 4.875% and 5.625%. Pretty cool right?
So here is an example of a purchase I am working on now. The buyer is purchasing a home with foundation issues, and a bunch of other problems for $290,000
The FHA HUD Consultant estimates the repaired to be around $110,000, so the new loan amount, which has to abide by FHA County Limits, is maxed at $406,250.
In the area of Denver we were in the cost per square foot was a little over $210. The property was 2800 square feet. So that means we can justify an after appraised value of $588,000.
Even if the buyer wanted to sell the property in six months, he will have an amazing profit of over $180,000! You see? A FHA 203K Loan is the way to go for any fixer upper job whether it be a purchase or refinance.
You can either do a PURCHASE or REFINANCE with this loan and here's how it works:
It's simple, all you do is roll in the comprehensive repairs that are to be completed by the general contractor and subs in to your loan amount.
If you want to add any additional square footage to your home such as adding a garage, bedroom, bathroom, deck, or new kitchen, it can all me rolled in to the same interest rate. Whether your remodeling one room or the entire home with multiple jobs it can all be done with the same contractor and same interest rate which is now only between 4.875% and 5.625%. Pretty cool right?
So here is an example of a purchase I am working on now. The buyer is purchasing a home with foundation issues, and a bunch of other problems for $290,000
The FHA HUD Consultant estimates the repaired to be around $110,000, so the new loan amount, which has to abide by FHA County Limits, is maxed at $406,250.
In the area of Denver we were in the cost per square foot was a little over $210. The property was 2800 square feet. So that means we can justify an after appraised value of $588,000.
Even if the buyer wanted to sell the property in six months, he will have an amazing profit of over $180,000! You see? A FHA 203K Loan is the way to go for any fixer upper job whether it be a purchase or refinance.
About the Author:
To learn more about the 203K Loan Standard Loan contact Brian Quigley, Colorado Mortgage Consultant.