There are a lot of properties on the market today that need work. It’s a good investment to purchase the worst home in the best neighborhood and add your own sweat equity. Unfortunately, you might not be able to purchase that property if you are using traditional FHA financing. The 3.5% down loans offered through FHA require an approved appraiser’s assessment of the condition of the property. The appraisers opinion of repairs needed for Health and Safety are the primary concern. The appraisal may be made conditional on the repair of issues such as peeling paint, exposed wiring, leaky roofs, etc. A list of possible items can be found here.
There is hope for FHA buyers, however. The Federal Housing Administration’s rehab loan product, the FHA 203(k) loan, was designed for individuals who want to rehabilitate or repair a damaged home so they can live in it as their primary residence.
With this program, the buyer borrows the funds to make repairs and purchase the property in one loan. You can do the repairs yourself with some restrictions. The process isn’t easy but worth the effort when you’re in your new home.
If you’d like more information and help finding a lender experienced with FHA 203(k) loans, call me.
Nancy Irwin, (760) 533-1119
The Cristine Clark Team, Realty Executives
CA DRE License #01202384