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Basically Speaking What Are The FHA 203K Rehab Loans?



Purchase And Rehab A Home All In One Loan!


Most lenders who offer mortgage financing plans will only include the "take out" or permanent financing portion and will not close the deal and release the funds until all the ancillary conditions are met. If there is any type of "rehabilitation" of the property involved, the permanent lender will require that ALL of the rehab property improvements be completed and "signed off" by local building inspectors prior to the "take out" loan being placed. Ergo, if a home-buyer wannabe decides to purchase a property desperately in need of repair or upgrading, the home-buyer will be required to seek and obtain TWO loans:
Loan #1 - Financing to insure there will be a permanent loan put in place once the rehab is finished in order to pay off all "short-term" loans Loan #2 - Financing to do the needed repairs on the property in question.
Using this unique FHA-HUD rehab you "by-pass" those two requirements. Lenders have seen the light and joined with state a local housing agencies as well as non-profit organizations to rehabilitate properties that have been left in run-down conditions causing a "blight" in many areas.

Properties That Are Eligible!

Like many government loans a homeowner will face hurdles to overcome; the 201(k) rehab loan is no different in terms of eligibility. So you must search for single family properties, duplex, triplex, or four-plex units that have been completed over a period of at 12 months. Plus, the number of units on the property site must meet all zoning requirements and new construction units must be "attached" to the existing property. However, one thing in your favor if you\'re a potential rehab wannabe is that homes that have been torn-down or demolished or will be, are eligible as long as some part of the foundation still exists in place.

How The FHA 203K Rehab Loans Program Can Be Used!

The homeowner can use this program to finance such items as painting, total room additions and outdoor decks. This program can also be used to do the following:

  • Purchase a property AND the land where the potential rehab home or units are located.
  • Purchase a home or units that currently exist on one site, then have it moved to another site
  • Put of a new foundation system on the mortgaged property and begin the rehab process
  • Loan proceeds for the moving of the home will not be made available until the home has been set down and attached to the new foundation.
  • Refinance all existing "liens" that currently exist against the property and rehab the home or units.

The FHA 203K rehab loans program is the ultimate solution to homeowners and lenders alike. If you have an interest in moving forward on a project of your own, locate an FHA-approved lender in your area who will be able to provide complete information on the nuances of the program as well as the required paperwork.

 



  



Joe Canestraro NMLS # 219951,OH #LO.001509.000; FL #LO24523, Branch Phone 330 865 9600 Ph. Ext. 1
Home Loans and Refinancing for the States of Ohio and Florida.
The Money Connection, a DBA of Polaris Home Funding Corp. NMLS #38072, Phone (616) 667-9000.
THE MONEY CONNECTION. Member Since 2003 | THE MONEY CONNECTION