Need a Fixer UPPer Loan? Then You Need a FHA 203K Loan

The FHA 203K loan is one you probably haven’t heard of very often. However, this standard fixer upper loan has been around since the 1970’s. The reason that you don’t hear about them much is either because the borrower is working with a rookie loan officer who doesn’t know about it or they just don’t want to take the time with the extra paperwork at the time of the close. I myself specialized in the FHA 203K Loan and it is all I do here in the amazing state of Colorado.

You can either do a PURCHASE or REFINANCE with this loan and here’s how it works:

All that you do is roll the comprehensive repairs being completed by the general contractor and subs into your loan amount. That’s how it works.

If you want to add any additional square footage to your home such as adding a garage, bedroom, bathroom, deck, or new kitchen, it can all me rolled in to the same interest rate. Whether your remodeling one room or the entire home with multiple jobs it can all be done with the same contractor and same interest rate which is now only between 4.875% and 5.625%. Pretty cool right?

So here is an example of a purchase I am working on now. The buyer is purchasing a home with foundation issues, and a bunch of other problems for $290,000

The estimated work by the FHA HUD Consultant was around $110,000. This new loan needs to be abide by FHA County Limits which is maxed at $406,205.

In the area of Denver we were in the cost per square foot was a little over $210. The property was 2800 square feet. So that means we can justify an after appraised value of $588,000.

Even if the buyer wanted to sell the property in 6 months, he will have an amazing profit of over $180,000! You see? A FHA 203K Loan is the way to go for any fixer upper job whether it be a purchase or refinance.

To learn more about the FHA 203K Standard Loan Loan contact Brian Quigley, Colorado Mortgage Specialist .