The program is an excellent way for many buyers to purchase properties in poor condition at reduced prices. This specialized loan also allows buyers the ability to afford the repairs that they may have otherwise struggled to accomplish.
For a listing agent that is selling foreclosures getting the word out that this program is eligible for rehab financing is key. The best way to do that is to list it in MLS as “203k Eligible.” Having signage in the front yard has also proven to work well. It does not do any good to have foreclosure listings unless there are programs to help get the repairs financed….the 203k loan makes it a win for the seller as they do not have to do the repairs and the buyer wins as well with a great low rate and most of the time a nice equity position.
The 203k loans are not only for purchasing a new home but can be used as a great way to update your existing home by refinancing and rolling in the cost of upgrades.. If you are getting the urge to move to a new home with all the modern updates this loan allows you to simply refinance and roll the upgrades into the loan. If you would like an updated kitchen with let’s say granite counter tops or hand scrapped hard wood floors in your entry way….we have the loan for you.
Another plus is that being an FHA loan the qualifications are a bit more relaxed. With a 640 FICO score and a debt ratio under 50% (with automated approval) you can qualify for this loan. Of course getting pre-qualified is good practice for not having any issues down the road but these are the basic requirements for FHA 203k pre-approval.
With this one great loan you can make all of the cosmetic upgrades to your home that you desire and no moving will be required!