Want to Buy a Fixer-Upper but Don't Have the Money for Repairs? Consider a 203k Rehab Loan
If you are a handy type of person, and are interested in purchasing a fixer-upper home but you don't have the funds to make all of the repairs needed, there may be a financing option available for you: The 203K Rehab Loan.
The 203k program is an FHA-based loan program that provides a loan to buyers who purchase properties that need significant repairs. For buyers who do not have the savings to pay for repairs outright, the 203k loan allows the buyers to obtain a loan for the work that needs to be done. The buyer can then purchase the home and make the necessary renovations, using funds from the 203k rehab loan.
I have found this to be a wonderful option for the buyer who is qualified for a low purchase price. In Massachusetts, a low purchase price often means a property has been neglected and may contain extensive damage. A regular FHA loan will not be approved for a home that needs major repairs; however, the FHA 203k loan means the buyer may be able to purchase the property.
Be aware that the 203k loan means that you have to be willing to get the work done right away, usually wihtin six months of taking ownership. Also you have to work with contractors and sometimes may not be able to live in the home while the repairs are being done.
However, if you are willing to be patient, a 203k loan can be a great way to buy a bargain property and bring it back to life.
Here is another article about the 203k loan:
If you would like to find out if you qualify for a 203k rehab loan, please contact me. I know several loan professionals who can help you with a 203k rehab loan.
Yours in real estate,
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Text and photos copyright Kathryn J. Acciari unless otherwise noted.
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Kathryn Acciari, RSPS, SRS, RESE, CFA
Century 21 MetroWest
45 Lyman Street Suite 14
Westborough MA 01581
Serving the Route 9/20 Corridors of Central Massachusetts
Sturbridge to Westborough
Cell: (508) 982-0686