Repair and Rehab

Buyers with their sights set on a “fixer-upper” should consider a HUD-approved FHA home loan known as the 203K that combines funds for the home mortgage with money for repairs, rehab, and improvement in one closing. The mortgage amount is based on the projected value of the property with the work completed. The FHA 203K must be used for a borrower’s primary residence, either a single-family home, 2-4 unit property townhouse (as long as one is owner occupied), and condominiums (needing internal repairs only). The FHA 203K is also one of the only government-funded, energy-efficient home loan programs that enables borrowers to finance solar energy installation and fund the cost of updating appliances that conserve water and energy.
HINT: While the 203K program was first designed by the FHA to revitalize neighborhoods, it is currently a valuable tool for those wanting to purchase a distressed property.

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