March 16, 2011
It’s true that those dedicated to purchasing and improving a fixer-upper home face a challenging road when it comes to getting the money to do the job properly.
A loan applicant trying to get a conventional loan may face requirements that the improvements be done and paid for before the money for those repairs will be issued–not an ideal situation for those trying to balance budgets, pay the mortgage on time and improve their property.
An FHA loan could be the answer. The 203(k) loan program provides qualified borrowers with an FHA insured loan to those using the property to be improved as the primary residence. (It’s not for investment properties or rental units.)
As with other FHA mortgage loans, there is a 3.5% minimum down payment. But 203(k) mortgages are a bit different. The FHA official site says, unlike purchasing a home with a traditional FHA loan, for the 203(k) the borrower must draw up a sales contract after “doing a feasibility analysis of the property with their real estate professional. The contract should
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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