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Buy It, Fix It, and Finance It All With One Loan

See a house with potential? Turn it into your dream home with an FHA 203(k) loan.

Homeowners renovate with FHA 203k loan

You walk up to the front door. This is it! You scoured every listing website for photos of the house. You didn’t find many, but the description sounded perfect, so you couldn’t wait to see it in person!

You turn the knob, open the front door, and walk from room to room. There’s the first-floor powder room you’ve always wanted! Too bad the sink doesn't work. You walk over to the kitchen and immediately head to the center island. You begin to imagine all the fancy dinners you’d cook, but you wake up from the daydream when you notice that the counter top is cracked, scratched and stained. Then, you look to the left and notice that the cabinets completely clash with the floors.

You decide to head upstairs. Is that blue shag carpeting? How could you have missed that detail in the listing? Ah, there’s the one bedroom with hardwood flooring. Of course, it was the only one shown online. You begin to wonder if this is really the home for you.

This scenario is all too real for today’s homebuyers. Many times, it causes them to move on and not make an offer on what could be their perfect home. The thought of closing on a home and then applying for a separate renovation loan is enough to make someone give up before even trying.

According to the 2018 Houzz & Home Survey, first-time homebuyers and long-term homeowners spent an average of $15,000 on renovations in 2017, while repeat buyers spent $25,000. Can you imagine taking out an additional loan or using a credit card for that amount?

What if you didn’t have to use a secondary form of financing? What if you could qualify for purchase and renovation financing all at once and have only one monthly payment? Or what if you didn’t want to move at all?

Imagine if you could refinance your current home loan and bundle renovation financing all into one! You can do exactly that with an FHA 203(k) Standard Loan. Here are the answers to a few of the questions you may have:

What are the benefits?

  • An FHA 203(k) Standard Loan could be a more affordable solution to finance repairs and improvements than other methods like home equity lines of credit, credit cards or personal loans.
  • The interest you pay on your mortgage may be tax deductible (please consult your tax advisor for specific details).
  • Repair work isn't stretched out over months or years.
  • You can customize the home to meet your needs.
  • Improvements may increase your home’s value and resale marketability.

What are the disadvantages?

  • More parties and steps are involved with FHA 203(k) loans, including appraisers, consultants, contractors, and inspectors.
  • Additional costs may apply.

Who is eligible?

  • S. citizens.
  • Permanent resident aliens.
  • Qualified non-profit organizations.
  • Qualified non-permanent resident aliens.
  • State and local government agencies.

What are the property requirements?

  • The property must have been completed for at least one year.
  • Eligible properties include 1 to 4-unit attached and detached single family residences and planned unit developments, FHA-approved condos, modular homes and mixed-use developments (conditions apply).

What else do I need to know?

  • Homes must be occupied by the owner (no second homes or investment properties are allowed).
  • Transaction must be a purchase loan or refinance.
  • Identity of interest (buying from a relative or business partner) is not permitted.
  • Loans are subject to certain appraisal and construction requirements.
  • Requires a minimum of $5,000 in repairs but has no maximum limitations (appraisal required).
  • A HUD consultant and one general contractor will be required.

A long list of major structural and non-structural problems can be fixed with an FHA 203(k) Standard Loan. Your licensed CrossCountry Mortgage loan officer will be happy to go over them with you, answer any additional questions you may have, and help you kiss that blue shag carpet goodbye!

Does this loan sound like it could be right for you? Take the next step and start the conversation today!

CrossCountry Mortgage, LLC is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. All loans subject to underwriting approval. Certain restrictions apply. Certificate of Eligibility required for VA loans. USDA Loans: Borrower income limited to 115% of median income for the area. Borrowers must have reasonable credit histories. 30-year loan term. Housing costs cannot exceed 29% of income; total debt payments cannot exceed 41% of income. Homes must meet state and HCFP building codes. Funding fee required. Available only in designated USDA rural areas.

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