The house does not have to be falling down to be eligible for an FHA 203k renovation loan.
It's so easy to do a this kind of loan.
You find the house. You decide how you think it should be.
You get quotes for paint, carpeting, appliances, whatever.... and le voilà, you have a beautiful home for less money.
Finance your home while mortgage rates are low.
Then when the mortgage rates are high sell the same house to a qualified buyer who can assume the mortgage.
It's a win-win for everyone!
This is a most unusual FHA 203k project don't you agree? Who would have guessed that this home would ever quality for a 203k loan. The list price was over the maximum loan amount for FHA in the area so why did it make sense to use this loan program to purchase the home?
If you think about it, it isn't so hard to understand. The choices were to purchase with all cash then repair it OR if you want a mortgage then it has to show the deficiencies being corrected, thus the 203k was the choice. Most of the work on this home was cosmetic in nature but the electrical issues were extensive.
Yes, it could have been done with a HomeStyle loan by FannieMae too.
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