The FHA 203k program is a great loan fopurchasing REO homes or simply a home that needs some repair. It can also be used for a refinance.
Since I'm a journalist as well as a realtor, I have the lucky happenstance to learn more about selected subjects, to write about them and to share my new knowledge with those who might want to know more as well.
I must confess that I was embarrassed until recently that I didn't know enough about the 203(k) loan and had never recommended one to any of my buyers. But when I met Sal Callarme of Continental Home Loans in New York, I know I had the opportunity to learn from someone who knows what he's talking about.
Here is the lead from that article:
"Most people don't know about the 203(k) loan," said Salvatore Callareme, a mortgage consultant with Continental Home Loans, reminding me that I've been hearing more about greater numbers of applications for this loan from individuals who want to purchase foreclosures, vacant properties and fixer-uppers in need of work, as well as those who want to upgrade or repair their currently-owned homes.
The Section 203(k) loan program is offered by the U.S. Department of Housing and Urban Development (HUD) allowing an individual home buyer to finance the purchase of a property and to include the cost of its repairs through a single mortgage. Such loans are provided through HUD-approved mortgage lenders and insured by the Federal Housing Administration (FHA).
The 203(k) program is particularly beneficial to moderate-income buyers because the down payment can be as low as three percent. The loan can be taken as a 15- or 30-year fixed rate mortgage or as an adjustable rate from an HUD-approved lender. The total amount of the mortgage is based on the projected value of the property after the renovation is completed, and the purchased property must be used as a principal residence for the buyer. A portion of the loan pays for the purchase of the home and the remainder is placed in an interest-bearing account and released in stages as rehabilitation is completed.
To read the entire article, click the link below:
You Can Upgrade Your Home with a 203(k) Loan
Bill Primavera is a realtor specializing in the upper Westchester and Putnam County markets of New York. Also he writes as The Home Guru in the Examiner Newspapers in the region.
If you want to know more about his practice, visit: www.PrimaveraHomes.com
Michael Byrne
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