In today’s economic environment, many who sell homes are finding that their clients are interested in purchasing a resale home—particularly one that seems to be a great bargain due to a foreclosure or a short sale.  Only one problem….oftentimes, these homes need some repairs.  Sometimes, extensive repairs.  Time’s are tight.  How can a potential homebuyer both purchase a home and have enough money to repair it?

When a homebuyer wants to purchase a home in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling.  Then they need additional financing to do the rehabilitation, and finally, a permanent mortgage when the work is completed.  In cases like these, the FHA 203K Home Purchase and Renovation program, which was designed to address cases like these, might be the answer.  The borrower secures a 30-year fixed rate to finance both the acquisition and the rehabilitation.  The 203K requires a minimum of 3.5% down.
   Buyers today often tend to be first time homeowners with little money to put down, and they usually don’t have the funds to take a fixer upper and renovate it.  Many of the homes being foreclosed upon have been stripped of their amenities and will not meet the FHA minimum property standards required to get an FHA loan.  Let’s face it—we all know that we need to work through this foreclosed inventory in order to put new home building (and sales!) back on the front burner. 
   A 203K Renovation Loan can be used to repair major items on a home—including foundations—as well as roofs, kitchen and bath remodels, upgrades to heating and air conditioning systems, energy efficiency improvements, landscaping and exterior repairs.
   With the 203K program, the home purchaser can do all the required repairs and roll the cost into the loan.  A potential home buyer is able to purchase a home in the neighborhood they desire, create the home of their dreams, and take one more home off the market—an admirable goal in re-building our industry in Northern Nevada!

(Desiree LeBleu is a Loan Officer with PrimeLending, a PlainsCapital Company.  A 203K program specialist, Desiree can be reached at her Reno, Nevada office at 6900 South McCarran Blvd, Suite 2020, by phone at 775-448-9577, or by email at dlebleu@primelending.com)

Desiree LeBleu
Loan Officer, Prime Lending

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