Have you ever passed by a house that was in need of a lot of repairs? Did you see the potential of this property, and could see it turning into your dream home?
If only you could afford to fix the place up! If this is something you have found yourself thinking of, a 203(k) home loan may be the loan for you.
A 203(k) loan is an all-in-one home loan endorsed by the FHA, under the Department of HUD.
This loan includes not only purchase costs, repair expenses and home improvement costs it also allows for a low down payment of 3.5 percent of the purchase price plus construction costs!
What are your options? Well, there are two types of 203(k) loans:
Regular 203(k): For homes that require structural rehabilitation and
Streamlined 203(k): For homes that require non-structural improvements or minor remodeling.
Below are some key points to remember regarding 203k home loans:
- Great for first time home buyers
- Low interest rates
- Flexible terms of payment
- Flexible eligibility criteria
- All of the costs of purchase and rehabilitation including manual labor and materials are covered by this loan
- Provided for one-four unit homes that are at least 1 year old
- Rates can be fixed or adjustable
- Loan must be used to rehabilitate residential property
- The property should not have more than a quarter of its total floor area
involved in commercial use
- Commercial use of the property must not be a hazard to the health of the residents