Competition in the mortgage industry has resulted in a great opportunity for buyers who want a “fixer upper.” Private lenders have devised all sorts of unusual loans to put money into the hands of credit-worthy buyers. Now FHA is getting in on the action by offering a new “limited repair” loan, or the “Streamlined K.”
How does this kind of loan help buyers? Those with lower incomes but healthy credit histories can now buy less expensive homes in need of repairs, and roll the cost of those repairs into the mortgage.
Up to $35,000 in repairs can now be eligible for addition to the loan amount (up to 110% of the property’s value). Qualifying repairs include, but are not limited to, projects like roofing, heating and air conditioning systems, plumbing and electrical systems, weatherization and insulation, handicapped accessibility, siding and painting, even new appliances.
It used to be that purchase contracts involving FHA loans were considered a delicate business, because appraisers often insisted on the sellers making silly little repairs or bigger improvements which sellers simply did not want to complete. Now sellers have less responsibility, while buyers have greater flexibility.
I personally get excited about this kind of financing, because it allows more people to participate in the American Dream of home ownership. Contact me or a loan officer for more details about how you can move into a “fixer upper” in the Bennington VT real estate market area.
Categories: Investment, Bennington VT