Looking For A Great Rehabilitation Loan?- Try FHA 203K!

The FHA 203(K) rehabilitation loan is HUD’s(U.S. Department of Housing and Urban Development) primary program for the rehabilitation and repair of single family properties. Contrary to popular belief(even among some real estate agents), HUD does not directly fund these loans. These loans are funded through HUD approved lending institutions and HUD insures the mortgage loans on behalf of the lenders.

The 203k loan allows an owner-occupant borrower the ability to purchase a property in need of rehabilitation with one mortgage loan at a long-term fixed rate with a minimum of 3% down. For example, I had a young couple(first-time buyers) just close on a house in Hamden, CT yesterday and they went FHA 203(k) for the loan. They had a great experience. They actually purchased a bank-owned property for $180,000 and built $25,000 into the loan for the rehab and only put a 3% downpayment plus their closing costs. This program made a lot of sense for them especially since they couldn’t find anything on the market up to their standards. They have 6 months to complete the work and when they are done they basically have a brand new home. This program is surprisingly user-friendly and straight-forward as long as you meet HUD’s requirements to participate in this program.

If anyone has any questions regarding this program or would like to be put in touch with a HUD approved lending institution, just let me know.