Up to $35,000 in Repair Money with FHA 203(K) Mortgage

We see deals that fall through because a property has fallen into disrepair, and neither the buyers or the sellers can afford to make the repairs. But there is an easy solution. Here is an example.

Buyer - You are approved for $150,000 and you can buy the home for $125,000, but the home needs $15,000 worth of repairs to the roof. Since you have roof damage, you will not qualify for most mortgages.

Taking this one step further, neither you or the seller has the additional $15,000 to fix the roof prior to sale OR this is a foreclosed property and the bank that now owns the property is not making the repair.

Solution - You are approved for a $150,000 mortgage and the home is only $125,000, so there is $25,000 of wiggle room if you use a FHA 203(k) mortgage. This allows you to build the $15,000 worth of repairs into the overall mortgage, so there is no additional upfront money you need to come up with. The $15,000 roof is built into the price of the home, as if the roof were fixed prior to the sale and simply built into the house.

Here is what you will find on the HUD Government website . . .

FHA's Streamline 203(k) Mortgage - The “Streamline (K)” Limited Repair Program permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser. For more information - Click Here

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