If you’re looking to buy a home for a bargain price, you’ve probably seen some “fixer uppers.” In the Dallas/Fort Worth area, there are dozens of homes that are priced quite cheap, sometimes with thousands of dollars off the typical price of a home on the same block. And all they need is a little TLC. First time homebuyers should know that there’s an FHA loan program just for this scenario. You don’t have to buy brand new—it just needs to be new to you!
HUD – FHA 203K Loan: The Fixer Upper Loan
Using a very similar process to applying for an FHA loan, the 203(k) loan is a guaranteed home buying loan from the government that is specifically designed for houses that need repairs. In fact, there are protections available in this loan program in case your fixer upper costs more than originally budgeted! You can renovate and repair a home with this government guaranteed loan, and you won’t have to worry about unforeseen circumstances.
To apply for these loans, you will follow the same procedure as a regular FHA loan, which includes an application process, credit check, and creating a financial picture for your lender. You can only work with FHA-approved lenders to secure this type of loan, so make sure to do your research once you’ve found the fixer upper of your renovation dreams!
The only difference? You’re on the hook for the appraisal. Most FHA-approved loans are homes that have been appraised by the lender. In other words, the person financing your home tells you what it’s worth. With the HUD 230(k) program, you will need to do your own homework. You’ll need to have the house appraised, and you’ll need an expert opinion or two about what repairs and renovations need to be made to fully rehab the property. The labor and repair costs will need to be factored in, as well as things like new wiring, floors, and other structural fixes.
Linda Peterson will help you find your dream “Fixer Upper”
If you are considering purchasing a fixer-upper in the greater Dallas-Fort Worth region, call Linda Peterson. Linda would be delighted to walk you through the process and will use her considerable experience and skill set to make your home buying dreams come true. Call her today at (817) 829-3000 or fill out a contact form.