Interested in purchasing a foreclosure, short sale or other home that needs work?

Then you need to know about a special loan program administered by the Federal Housing Administration.

The Section 203(k) program provides approved borrowers with the funding necessary to not only purchase a home but also to rehabilitate or repair it. Normally, when a buyer purchases a home in need of repair, he must first obtain financing for the purchase and then get additional financing for the rehab. The 203(k) program was designed to eliminate the hassle and cost of two separate loans.

The 203(k) program has become increasingly popular over the past year because so many properties—particularly those under foreclosure—are in need of repair.

Here are some details on the program:
· The home financed must be at least one year old.
· Part of the loan proceeds are used to pay the seller (or if used for a refinance, to pay off the old mortgage) and the rest are held in an escrow account and released as the repair work is completed.
· The cost of the rehab must be at least $5,000, and the total value of the property must fall within FHA mortgage limits for the area.
· One- to four-family dwellings and condominium units are included (if the condos are in approved projects). Coops are not eligible.
· The repair work can range from minor repairs (as long as they cost $5,000) to virtual reconstruction. Luxury improvements are not eligible.
· Applications must be submitted through an FHA-approved lender.
· Investors are not eligible; the property must be owner-occupied.
For more information on 203(k) loans or available properties in your area, call Phillip Lopez Today!