Lehigh Valley FHA 203k Renovation Home Mortgage and Financing

I believe one of the most mis-understood mortgages available to Lehigh Valley Home Buyers is the FHA 203k Renovation mortgage. When you hear the word renovation you think "lots of work". This isn't true.

FHA 203k Home Financing can be used for something as simple as replacing windows, updating a kitchen or bath or replacing carpets and painting.

Since it is an FHA program, the guidelines are enforced with respect to the fact that the property must be Owner Occupied. It can be used to purchase a 1-4 unit investment property but one of those units must be occupied by the buyer.

The FHA 203k Mortgage can be used to purchase:

• HUD Homes
• Foreclosure Properties
• Bank Owned/REO
• Any property needing work that the buyer wishes to include in the mortgage

In addition to cosmetic updating, an FHA 203k can include:

• HVAC
• Roofs
• Gutter
• Siding
• Windows
• Flooring
• Septic or Well
• Electrical
• Plumbing

Just about anything can be included that does not involve Structural Repairs.

An example:

A buyer makes an offer on a house that needs the kitchen updated. They agree to purchase the house for $90,000 but get a loan for $105,000 to include a kitchen update and some other work. The seller will get their $90,000 and as long as the home appraises (taking into account the updates) the buyer will have 6 months to get the kitched remodeled and perform the other updates (for $15,000).

Since it is an FHA loan, the buyer can still request up to 6% sellers assist to help with closing costs.

For more information visit Lehigh Valley Homes Online.