Abandon House Comes to life with FHA 203K Renovation
An excited couple is buying their first home in Cleveland, TX with an FHA 203K Renovation Loan. The home had been abandon, vandalized and was in need of major TLC. They must of had a vision or maybe they are just avid HGTV watchers because they were determined to find a way to purchase this home with a mortgage. They found it with FHA 203K renovation loans!
You will see in the numbers below that the borrowers invested about $65,000 in rehab to bring the property up to minimum property requirements. You will also see that they now have instant equity. With an appraised value of $250,000 up against purchase price + renovation cost. This was a great investment!
FHA 203K Renovation Numbers
Purchase Price
Base Bid
Contingency
Inspections
$103,000
$62,645
15%
5
After improved value of $250,000
This rural home was originally built in 1980 and has seen upgrades over time. Being abandon for an unspecified amount of time has left a major needs list for these borrowers to include in the scope of work. Check out some of the specs and photos below and imagine your own hidden gem so you can widen your search while on the house hunt.
A property in this condition needed major overhaul for all of the major systems:
- Electric - rewiring to junction box and bringing up to code throughout
- Plumbing- set up for new shower in master bathroom, Install new 2" well with 550 gallon storage tank and new tank less water heater
- Heating - Remove both current HVAC units and duct work completely. Install one 5 ton system (amana) with condenser. New plenum and return air duct work .Copper lines to new condenser. All new vents and insulated supply lines to code.
Non utility items included:
- Remove damaged soffit andreplace with matching product
- Remove partition wall in kitchen to create open floor plan
- Replace 8 windows
- Replace front door and back door to pool area
- Bring pool equipment up to code and clean pool
- Repair several drywall holes and damage
- Paint, lot and lots of paint!
- New hardwood floors and tile throughout
Did you know this about the FHA 203K Loan?
FHA 203K Loans have the same down payment requirements as a traditional FHA mortgage. FHA loans only require 3.5% down and credit scores can can be as low as 580 but anything below 620 can often have additional overlays like debt to income ratio caps and stricter requirements for past bankruptcy's.
Repairs don’t scare me and they shouldn’t scare you either. Call me today to discuss renovation loan options.