The purchase of a house that needs repair is often a catch-22 situation, because the bank won't lend the money to buy the house until the repairs are complete, and the repairs can't be done until the house has been purchased.

HUD's 203(k) program can help you with this quagmire and allow you to purchase or refinance a property plus include in the loan the cost of making the repairs and improvements.

TYPICAL HOME MORTGAE LOANS ARE DIFFERENT FRON FHA 203K! 

Most Typical Home  mortgage financing plans provide only permanent financing and NEVER any funds for Rehabilitation,Deferred Maintenance or Home Improvements. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements and all work  to be finished before a closing long-term mortgage is made. 

203(k) - HOW IS IT DIFFERENT!

The borrower can get just one mortgage loan, at a long-term fixed rate loan to finance BOTH the Purchase and the Rehabilitation/Home Improvement of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan. 

Eligible Property

To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.

Condominium Unit

The Department also permits Section 203(k) mortgages to be used for individual units in condominium projects that have been approved by FHA, the Department of Veterans Affairs, or are acceptable to FNMA under the Specific Guidelines.

Eample of Home improvemnts:

• Kitchen                                 
• Baths
• Roof
• Painting
• Doors
• Windows
• Flooring
• Room Additions
• and more

Contact Us.