Are you a fan of Property Brothers on HGTV? They’re the guys who help homebuyers turn dilapidated houses into dream homes. Well, it’s probably the only show my husband and I agree on, so we watch a lot of it. (He’s not so into The Bachelor, and I’m not so into WWE.)
Until I became a loan officer, I always wondered how the financing behind the project worked. Now I think I have a good idea: It’s called an FHA 203k loan. An FHA 203k loan allows you to purchase a home and finance the costs of renovations into one loan. Read all about the program here on HUD’s website.
Here are the three main reasons why a borrower might opt for a 203k loan:
- The home the borrower wishes to purchase is being sold “as-is” and it has health or safety related issues that FHA will require to be fixed prior to loan approval. The 203k allows the borrower to finance the cost of those repairs and close on the home prior to the work being completed.
- The home does not require repairs, but it is old or outdated and the borrower wishes to finance the cost to upgrade or remodel the home before he or she occupies it.
- The borrower currently owns a home that is old and outdated and he or she wishes to upgrade and remodel the home by financing all the costs into their mortgage with an FHA 203k refinance.
Since inventory is so low right now in the Richmond, Virginia, market, you might be having trouble finding the perfect house. An FHA 203k loan could be the solution to your problems. If you’re looking for a mortgage loan in Virginia or have questions about an FHA 203k loan, please feel free to contact me. My company, First Home Mortgage, has an entire department devoted to 203k loans, so we are the experts! Also, if you need a realtor to help guide you through the process, I’d be happy to recommend one.