How to buy a foreclosure with, low scores, little downpayment, no fix up money?
March 14th 2008 07:34 am
Don’t have perfect credit but want to buy a foreclosure that needs work?
Don’t have the money for the fix up renovations?
Only have a very small down payment, less then 5%?
Can’t qualify for a conventional bank loan?
Well this is for you.
There is a program that is backed by the U.S. government that may be able to help you.
The FHA 203(K) loan will allow you to finance renovations even if you have low credit scores and low downpayments.
Minimum down payment is 3%,credit scores as low as 550, Finance up to 6 months of mortgage payments, you can purchase or Refinance and renovate all in one loan.
This program allows you to fix up a home that may be in need of repair, either the home that you are currently in, or a fixer-upper opportunity including foreclosures and short sales.
Property types
Single family dwellings, Condominium, Townhouse, Mixed Use (Storefront),1-4 Unit buildings- you can increase or decrease the number of units, Changes for improved functions and modernization, Plumbing, heating air conditioning, and electrical upgrades.
Roofing, gutters and downspouts, Well and/or septic repairs,Flooring, tiling and carpeting,Energy conservation improvements,Access for the disabled,Major landscape work and site improvement,Health or safety hazards
The construction cost is estimated by an FHA Approved 203(k) (estimator), the cost consultant prepares a -write up” and 3 contractor bid packages are issued to the home owner/buyer.
The appraiser will be given a copy of your work-write up to estimate an after improved value for your new home or current home. They loan against that improved value thus giving you credit for the work to be performed.
These costs can be financed into the loan
Contingency reserve (10%-20% of renovation costs), Up to 6 months of mortgage payments, Permit costs, Consultant fees, Architectural & Engineering fees.
Steps to Buying a House Using FHA 203(k) Renovation Loan.
- Locate the home you want and submit a contract for purchase - contingent on a home inspection.
- After your contract is signed, schedule a home inspection with a 203(k) cost consultant to budget your renovation.
- After you approve the budget, the 203(k) cost consultant will prepare the work write up for the appraiser and lender, and will prepare three contractor bid packages for you.
- You can now bid your job to general contractors, or sub-contractors.
Appraiser gives a value to the home as if all work is completed.
Loan closing in 30 to 45 days average - Within 30 days of closing you must start the renovation project with general contractor, or sub-contractors.
Learn How To Buy Foreclosures With No Money Down/No Credit
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[...] If you are buying it to fix up and live in but don’t have much money to invest or for fix up, read my post on FHA 203k Loans. [...]
The Experts In Real Estate And Mortgages » Movie stars, Michael Jackson and Billionnaires also in foreclosure> on 15 Mar 2008 at 2:53 pm #
[...] unless you are a candidate for FHA financing (see my post on this program here), [...]
The Experts In Real Estate And Mortgages » Donald Trump and others say Now is the time to invest heavily in Real Estate on 15 Mar 2008 at 7:01 pm #
I was researching the same thing when I saw this.. I can not agree more - but I am still going to look for a better source
Government Home Improvement Grants Loan (2 comments.) on 14 Apr 2008 at 4:30 am #
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