How do I purchase a home in need of repairs using the FHA 203k loan in Texas, Louisiana, Arkansas, New Mexico or Oklahoma in need of repairs? More important what if those repairs include foundation??
Your first and obvious choice is to purchase the home “as is” and either pay for the repairs out of your own pocket or take out a home improvement loan. Home improvement loans are more difficult to get and come with a much higher interest rate. Also in some states, such as Texas, there are loan to value restrictions.
Lets take that one step further and what if that home is in need of structural repairs such as foundation or roof? Then that home would require a buyer to pay cash for that home!!
The better option is the FHA 203k Rehab loan. It was designed to render aid and help get these homes sold. The borrower can get just one mortgage loan, at a long-term fixed rate, to finance both the purchase and the rehabilitation 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.
With all of the foreclosures in Louisiana, New Mexico, Arkansas, Oklahoma, and Texas it’s more than possible to purchase your dream home under market value and customize it to your liking. In some cases because of the types of upgrades and repairs being done to the home the buyer will have realized a nice equity position.
Need to sell a home with foundation issues? No need to worry, the FHA 203k loan allows for foundation repairs so simply list the home for sale “as is.” Let the buyer finance the costs of the foundation repairs and even allow them to customize the home to their liking.
Call me today and let’s discuss the options when it comes to homes that are in need of repairs.