With the number of distressed, foreclosed, and short sale homes on the market today it’s pretty common for new homeowners to do some maintenance on their new homes once they move it. It’s just a fact – the previous owners couldn’t afford to do the repairs before selling the house to you.
If you’ve found a deal but don’t have enough money saved up to have the work done AND buy the house there are options.
Of course, you could live with the old wallpaper, dripping faucets, or dingy bathroom until you save up money for repairs. It’s not glamorous, but it works. And your spouse or kids might not love you for it…
If the repairs are more urgent, like an old roof, you may have trouble getting a loan. Or maybe you just want to move into a nice house and not live in a mess during renovations. Think about getting a 203k loan.
FHA 203k Loan Gives you Money for Repairs
This is an FHA loan program that gives you money to spend on home extensions. You pay 1/4 to 3/4 points higher on interest, the repairs have to be approved before closing, and the work needs to be done quickly once the home is yours.
The reason they will give you money for the repairs is that your house will be worth more money after the work is done, and they are loaning to you based on what the house WILL be not just what it is today.
“The loans take into consideration that needed remodeling can add from 4 percent to 12 percent to the value of a house, added Marshall, who will be in Orlando this week to speak at the Orlando Regional Realtor Association about 203(k) loans.”
Here is an explanation of what a 203k loan is and how it can help you buy the home you want to live in.