When a home buyer wants to purchase a home in need of repair or modernization, the buyer normally would obtain financing first to purchase the dwelling and additional financing to do the rehabilitation construction.
The FHA 203K program was designed to address this situation. The buyer can get just one mortgage loan, at a long-term fixed or adjustable rate. The fixed rate is presently a sizzling 4.25%. The financing is for both the acquisition and the rehab of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the home with work completed, taking into account the cost of the work.
To be eligible, the property must be a one-to-four-family dwelling. The home buyer can use the 203K to finance such items as painting, floor replacement, kitchen/bathroom remodel, roof replacement, electrical/plumbing repair. You can also add the FHA Energy Efficient Mortgage and make other improvements such as replacing an outdated heat/air system, adding dual pane windows, additional insulation and a new water heater.
Funds are held in a managed account and are disbursed throughout stages of renovation to the contractor. Contact Cara Mengali at Comstock Mortgage in Davis for more specific details on this wonderful loan program. This program gives you the luxury of potential instant equity in your home after the rehabilitation.
Please visit my website at www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home and easy access to view local area homes for sale.