Many home buyers have come to realize that the FHA 203K renovation loans are great vehicle to purchase a home and include funds to cover any need updating or new appliances, but fail to realize the program can also be used with condominium unit, town home and even modular or manufactured homes.
If you find any of these homes and they’re in need of repairs or just some serious updates, keep in mind what an FHA 203K home renovation loan and the team behind them can do for you.
- FHA Lenders offer not only financing of 97.5 percent for the purchase, but also do the same for new carpeting, appliances, layout reconfiguration and just about anything a home buyer would need to turn a dated home into a dream home.
- FHA 203K loans are just like traditional FHA loans, except they allow you to include the cost of repairs into your mortgage. That means you can do all the things normally associated with an FHA loan like using gift funds for the down payment; having lower FICO score requirements than a conventional loan and you can include foreclosures and short sales in your house hunting and possibly create instant equity.
Let’s address using the FHA 203K renovation loan for a condominium, townhouse, modular or an existing manufactured home that is permanently affixed to the property.
Every now and then a condominium unit in an approved FHA approved development comes on the market and these days they may be units that have been foreclosed on and bank owned. When this is the case, home buyers often find HUD has drastically reduced the sales price as compared to other nearby units, primarily because the interior is in bad shape, needs updating and their hyper-increased motivation to sale.
Other home buyers often shy away from these units, because they aren’t aware of FHA 203K and already have limited resources for a down payment and any repair seems out of their reach. Most never realizing FHA will kick in an additional $35000.00 into a mortgage for starters, to replace the carpeting, install new appliances, remodeling the bathroom and so much more! In fact, as long as your mortgage remains under $721,050 on Oahu and the property will appraiser within 110 percent of your sales price and renovation FHA lenders will finance needed repairs at 97.5 percent loan to value at today’s ultra-low interest rates.
FHA 203K renovation loans are also available for both modular and modular homes, as long as the property meets normal requirements of a standard FHA eligible property; but in need repairs. And yes, FHA 203K loans can fix needed repairs like the picture shows. I’ll leave it to your imagination what happened here.
Often times modular or manufactured or modular homes are found in rural settings and might be serviced by a well and septic system. These systems can easily fall into disrepair if they aren’t used regularly, as in the case of many foreclosed homes. Using an FHA 203K renovation loan not only can repair or replace a defective system; it can do just about anything needed, as long as the repairs are attached to the unit.
It won’t put on a new roof for the barn or shed, but it will replace the roof, windows, carpeting, update the home kitchen and bathroom or add an additional master bathroom and include it own bathroom. If you have any structural issues due to deferred maintenance FHA 203K can take care of that as well.
So if you’re looking for a place to call home, don’t limit your search to just a single family stick built home in pristine condition. Sometimes it’s easier to find the right neighborhood or area long before you find the right home. But, if you include FHA 203K as a possible financing tool, it changes the landscape by turning that not so great home into the home of your dreams..
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