FHA's 203(k) Program: Cash for Repairs and Mortgage Financing in One Loan

First-time homebuyers can be in a scramble for a down payment, much less cash for repairs, but they're in luck with the Federal Housing Administration's (FHA) 203(k) loan program.

While most mortgage loans provide only permanent financing, the FHA 203(k) program rolls all financing into one package: one mortgage loan, at a long-term fixed or adjustable rate, to finance both the acquisition and the rehabilitation of the property. The amount of the mortgage is based on the projected, or "as will be," value of the property, taking the cost of the work into account. In addition, it allows the homeowner to include the origination fee, the inspection cost and the cost to update the title insurance.

FHA 203(k) loans are also available to those who are refinancing, and can come in handy in cases of foreclosure sales, as money can be used to fix up the property and provide permanent financing.

Read more at Inman News.

Posted on March 31, 2010 12:55:12 by Blog Author