You know that halfway excited feeling you get when things are almost perfect, but not quite? Like, say you found a house in the perfect neighborhood, but the house itself is not so perfect. But the neighborhood is close to the playground your kids love. It’s just around the corner from your favorite gym so you can definitely get fit. And it’s just five minutes from the farmer’s market that sells the best peaches on Sundays. The only problems:
- The kitchen needs updating (no sign of the granite countertops your heart desired).
- The roof is leaking (buckets are not decorative items in your living room).
- It doesn’t have that extra bathroom you wanted (the one for guests where you can put out the “good towels”).
Good news: there’s a solution! Think HGTV and put your hard hat on. The FHA 203K Renovation Loan is designed for the purchase or refinancing of properties that require repairs and upgrades. These loans are backed by the government and can enable you to buy the house you want, and then provide the money you need to make repairs.
You don’t need two loans (one for the home and another for the repairs), just this one loan for repairs, saving time and money. The best part is that it could give you the means to find a home in your desired neighborhood and, through renovations, make it perfect for you and your family. To make it even more attractive, your down payment is low – equivalent to an FHA loan.
What can you do with 203K renovation loan financing?
- Buy an older home and fix it up with minor renovations.
- Refinance an existing home.
- Purchase a short sale or foreclosure that is in less than move-in condition.
- Buy a property that is in good shape, but could be improved with modernization or increased energy efficiency, which could also increase your return on investment.
But watch out – 203K Loans may not be approved for the following property types:
- Investor owned properties
- Second homes
- Incomplete home builds
- Mobile and Manufactured homes
Discuss this option with a mortgage professional and find your diamond in the rough. But make sure to work with a lender and mortgage professional that specializes in government lending and 203K Loans, as they will have the knowledge and expertise required to give you a positive experience.