How to Purchase Distressed Properties with a FHA Loan

By
Real Estate Agent with The McInerney Team with Realty Executives Associates 313389

In today's market I encounter a lot of Buyers who are enamored by the potential deals surrounding Foreclosures and Short Sales in and around Knoxville TN.  If these Buyers do not have the cash to put down to obtain a conventional loan nor have the cash to put into repairs/remodeling after closing this could be the end to their dream.  This is because properties that are in distressed condition or need a lot of repairs will most likely not qualify for standard FHA financing.

However, there is a great loan option out there for buyers who only have 3.5% to use as a down payment but still want to purchase a distressed property to repair called a FHA 203K streamline program.  The FHA 203K loan, often referred to as a rehab loan allows borrowers to purchase a home in need of repairs or refinance their existing their home for the purpose of remodeling a mortgaged property.  As part of this program the borrower can actually finance a maximum of $30,000 into their mortgage to make improvements on their new home.

The highlights/requirements of this program include:

  • Min 640 credit score
  • 3.5% down payment min on all purchases
  • Mortgage Insurance required
  • Ability to finance up to $30,000 for repairs (must be completed by a licensed contractor and contractor credentials, experience, and reference are required.
  • Available for purchase/refinances of single family residences (including HUD homes)
  • A single closing allows the rehabilitation funds to be escrowed and disbursed as work/repairs are completed.
  • Can be used to update homes/pay for higher cost items.

 

 

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Topic:
ActiveRain Community
Location:
Tennessee
Groups:
1st Time Buyers
Diary of a Realtor
Local Expert
REO
Short Sale REALTORS®
Tags:
203k financing in knoxville tn
rehab loans in knoxville tn
foreclosures in knoxville tn
short sales in knoxville tn
distressed properti

Comments 2 New Comment

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Rainmaker
87,695
Charles Gardner-Realtor/Investor
ZIP Realty, Inc-Houston District

Hello ladies,

Great info and thanks for making it available to our distressed home purchasers.

March 26, 2011 11:10 PM
Rainmaker
449,572
Joseph D. Federico
Eastern Massachusetts Real Estate
Donahue Real Estate Co.

Christine and Jennifer great information indeed.

March 30, 2011 09:29 AM
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Rainmaker
161,577

Christine McInerney

The McInerney Team, Knoxville TN Homes For Sale
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