I got an e-mail yesterday asking: What is a 203K loan? Every once in awhile I need to remember that I sometimes use acronyms and assume everyone knows what I am talking about. The reality is…in many cases the acronyms do more to confuse folks than to clarify. So I am going to take a step back and explain a little about the “203K” loan.
This loan program can be used for the purchase or refinance of a property that needs work. It allows you to borrow the funds you need to purchase and renovate the property. These loans are not new but took a back seat to other ways of financing the cost to renovate. With property values no longer increasing by double digits, and with equity loans being capped at 70-80% of current values (rather than 100% you could get just a few years ago), the options for financing renovations are limited. I started a thread on Zillow asking how folks are paying for home improvements. Inquiring minds want to know!
In addition to the FHA 203k program similar programs are offered by Fannie Mae and Freddie Mac.
Last 5 posts in FHA Loans
- Results of the FHA Audit - November 13th, 2009
- Fannie, Freddie and FHA Loan Limits Will Be Extended Through 2010 - October 30th, 2009
- FHA Improvements: New guidelines and Fewer Restrictions - October 26th, 2009
- Renovation Financing: Not all loan officers are created equal! - September 23rd, 2009
- FAQs on New Help for FHA Borrowers - September 17th, 2009
- Stumble it!
- Categories: FHA Loans, Home Equity, Mortgage Terms, Mortgage Types, Refinance, Uncategorized, foreclosure
Comments
2 Comments so far
Brian Brady
Don’t stop this. Some of the best blog ideas are responses we give to emailed questions. One of the best things about blogging is that you will gain authority, from links, and keyword-rich titles will help google find you.
Don’t stop this series; it’s REALLY good info
Cheryl
Yes. My firend saent me a link to your blog… I’m looking to buy a home too, and the best ones in my price range always seem to need a little more work. So the 203k seems to be the best option for me. thanks for making the advice to accessible!