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Letting FHA Be Your Home Repair Partner – Buying a Home In Need of Work

The FHA, Federal Housing Administration, provides loan guarantees that have helped millions over the years to afford and finance homes.  Coupling down payments as low as 3.5% with financing of some closing costs, FHA has made home ownership affordable to many who couldn't have gotten loans from other sources. With today's high foreclosure inventories, many are finding that they can afford more home because the foreclosure is priced well below its past market value.  There's only one problem, in that most of these homes have issues that require repairs to make them completely livable.  It's a catch-22, in that lenders want the home to be in livable condition before the loan is issued at closing.  The potential buyer can't do any repairs before they own it, and the bank just wants to let it go "as-is." Well, you can have your cake and eat it too, with an FHA 203(k) streamline loan.  It's not that much more difficult of a process, requiring extra steps to estimate and fund repairs: 

  1. A purchase price is negotiated
  2. Detailed estimates are gathered for repairs to bring the property up to good condition for a loan
  3. Repairs must be under $35,000 to qualify
  4. An appraisal is done to determine the value of the property once all repairs are completed

If the property's value is sufficient based on its condition after repairs, the loan is issued with funds placed in escrow to hire the contractors and complete the work.  Even better, if repairs will take a few months, up to six payments can be placed into the costs of repairs if the buyer can't live in the home while the work is being done.  So, don't let a bit of necessary work keep you from considering a super deal on a home.  Check with an FHA approved lender for a 203(k) loan.  If an FHA 203K isn't what you are looking for then maybe an FHA 203B is more your route with no repairs to a home.  Las Vegas FHA Mortgage can help you.

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