Here’s what a repair loan could do for you as a buyer in this tough seller’s market.
Looking to buy a home? Click here to search all houses on the local MLS.
In today’s fast-paced seller’s market, competition is fierce and multiple-offer situations abound for homes that are priced appropriately and in good condition. But what about those properties that could use a little TLC? Perhaps the bones are good, but it just needs a new roof, an updated HVAC system, or modern kitchen appliances. Instead of trying to outrun the stampede for a pristine property, take advantage of an exciting product called the FHA 203K Limited/Repair loan.
Here’s how it works: There is a limit of up to $35,000 that can go toward the kinds of repairs and updates mentioned above. Now, there’s actually a set list of improvements that can be approved. That list does not include repairs that are structural in nature (i.e. knocking down walls, fixing the foundation, etc.).
The property can go up to 110% of the appraised value with the financed improvements.
So let’s say you decide to go after a $200,000 property. You know that you’ll likely still be competing against multiple other people for it. You’ll go ahead and make your offer like normal—perhaps at $205,000—to get it under contract with an FHA loan. Then you’ll go visit with the same lender you talked to at the very start of your buying journey to make sure that you qualify for this specific type of repair loan. If so, then you, your lender, and your agent will work together to get bids from licensed contractors to repair those issues that fall under the program’s stipulations. The property can go up to 110% of the appraised value with the improvements, so there are lots of opportunities there!
Use this program to your advantage. If you’re actively looking for a home and interested in learning more about this unique repair loan, give me a call; I’d be happy to provide you with its full set of rules and regulations. I can also introduce you to our amazing lender who’s done a fabulous job helping our clients leverage this tool. Nobody wants to fork up $10,000, $20,000, or $30,000 out of pocket to address issues in their brand-new home; thankfully, with this option, you won’t have to.
I’m here to be your go-to resource. My team and I are on standby seven days a week, 9 a.m. to 8 p.m., and we look forward to assisting you with your real estate needs.