Profile picture for ChrisMumby

I am interested in buying a home and offering $80,000

but it needs work doing inside so i really need a mortgage of say $120,000 is this possible, or are there any other ways of obtaining money for the improvements to the house? I have been mad aware of a USDA loan/mortgage but i don't know if that will cover the cost of buying the house and being able to improve it.
  • May 30 2012 - Seabrook
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (7)

In my previous post, I mis-typed, the Rural Housing rehab can be used for BOTH a purchase and a rehab.

"The USDA rehab loan is for properties that you currently own/PURCHASING.

If your income is less than 50% of the Area Median Income as defined by the link I posted earlier (posting again), you could go the USDA rehab route but you may have a challenge finding a lender to do that as I don't know anyone who does it so I can't refer you to anyone.

https://www.efanniemae.com/sf/refmaterials/hudmedinc/
(link to check your area median income)

The more common approach is to go with the 203k loan however that'll require a down payment, but only 3.5% of your total amount you're borrowing, which on 120k, is $4,200 + applicable closing costs and pre-paids (to fund your escrow account).

I have numerous other posts on the 203k product, feel free to review those or my blog if you'd like to educate yourself further.

As I tell everyone in seminars/training, find a loan officer who SPECIALIZES in these as there are _many_ out there who say they specialize in these but do only a handful a year (or ever).  Don't be someone else's guinea pig.

Link below (blog post about rehab lending, I prefer to do Q&A instead of blogging):
http://www.trulia.com/blog/rob_weber/filter/category/Remodel_&_Renovate/45

If you have other questions, respond here or you may email me directly.

Best of luck! 
  • June 04 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ofe Polack
You should contact a lender and ask him/her what is the best mortgage for you given your financial profile.  There are loans that allow you to have some work done to the property, as part of the loan., FHA 203 for instance and also USDA Rural Development.  
  • June 01 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You'd be able to use a FHA 203k streamline or full (>35k in work or involving structural work) or a HomeStyle renovation loan (can be used for owner occupied, second home and investment properties) or a HomePath Renovation loan if the property is an eligible Fannie Mae REO (foreclosure).

The USDA rehab loan is for properties that you currently own.  You can get a loan of up to $20,000 or possibly a grant if you're of age.

As far as eligibility, anyone wanting to do the USDA rehab loan needs to read the following excerpt:

Eligibility: To obtain a loan, homeowner-occupants must be unable to obtain affordable credit elsewhere and must have very low incomes, defined as below 50 percent of the area median income. They must need to make repairs and improvements to make the dwelling more safe and sanitary or to remove health and safety hazards. Grants are only available to homeowners who are 62 years old or older and cannot repay a Section 504 loan.

https://www.efanniemae.com/sf/refmaterials/hudmedinc/

Bottom line, unless USDA considers a 203k/HomeStyle rehab "not affordable", you wouldn't be able to go that route anyway.

  • June 01 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ofe Polack
Try to contact a local lender who can provide you with the best possible loan to achieve your goals.  Goo luck!
  • May 30 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Rita Walker
USDA does offer rehab loans. However, you must meet the guidelines in order to participate.
FHA 203K and conventional rehabs are also available.

Not every loan officer likes to do these types of loans. They end up tied to you loan for months.
Search for a loan officer well versed in these types of loans. There are some loan officers that specialize in rehab loans.
Choose the option that best suits you!!!

Good Luck to You,
Rita
  • May 30 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

The other poster was absolutely correct -- an FHA 203K loan will provide an opportunity to finance the money needed for repair.

If you need some direction to find a lender, please contact me -- I can provide you with several reputable mortgage brokers who would be able to help.
  • May 30 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for wetdawgs
An FHA 203k loan allows one to get a loan to include repairs to a property.  Meet with a good lender to explore options.
  • May 30 2012
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.