Real Estate agents and buyers are always asking what makes the FHA 203k loan special and how can it transform a house. In a nutshell the FHA 203k rehab loan is a similar to a one time close construction loan. Take for example a HUD foreclosure that is being sold. We simply close the loan with an escrow account for those required repairs. The home is now sold and the new buyer has a way to fully customize their new home as well as a way to cover the required repair items.
- Client purchased a Single Family Residence in Dallas, TX for $226,000.00
- Performed $56,643.50 worth of rehab to the home
- After improved appraised value is $305,000.00
- Loan closed “as is” with several required repairs such as electrical system not up to code, damaged plumbing, septic system not functioning and no appliances in the kitchen
- With the escrowed funds the client was able to repair/replace all of the required items, install brand new appliances in the kitchen, upgrade all of the fixtures around the house, paint the interior and exterior, and open up the family room by removing one of the walls
, keep in mind that your seller doesn’t need to repair anything upfront if the home is marketed as 203k eligible!!
Let’s get the word out there about how great this loan is for all parties involved – buyer, seller, Realtors, etc. No need to walk away from the foreclosure or the “fixerupper” when the FHA 203k loan is involved.
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