The FHA 203k to fix a property up to FHA guidelines before closing

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It had to happen soon or later. I’m dealing with a property purchase involving the in-famous FHA 203k loan.

So, yes, this is a foreclosure. The purchase price is $100K. The 203k give the opportunity to the new homeowner/buyer to have a certain amount of money to put the property up to FHA guidelines. In this case, the amount allowed is $11,600. This money, while borrowed by the buyer and being on top of the mortgage amount, is actually distributed to licensed contractors in order to fix what need to be fix following the guidelines.

The thing is there is lots of paper works involved, from the buyer to the contractors themselves, who must fill some documents for the bank, including licensing numbers, business information and even a tax sheet to fill. And that’s for the highest bidder since you have to have few bidder on each particular job to be done.

This long process – think about at least 45 days for closing – actually show a good intention for first time home buyers who have not much money but still like to take the train in movement and get a good foreclosure deal that usually investors pay cash for them and leave the non investors on the side of acquiring equity from the beginning.

It is something exhausting for the Real Estate agent who want to be involved of helping those first time buyers ( and others ) but very thankful at the end of the day, meaning at closing. Chances are those buyers will get you in their mind for a good while…

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Comments (0) Mar 22 2010

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