Money Watch Q & A: FHA 203K Loan
If you can't afford a finished home, but you're willing to take on a fixer-upper there's a special loan available to you. It's called the FHA 203K loan. Learn more about it in tonight's Money Watch Q & A segment.
Wednesday, June 4th 2014, 12:55 PM PDT
If you can't afford a finished home, but you're willing to take on a fixer-upper there's a special loan available to you. It's called the FHA 203K loan.
The Federal Housing Administration created it to help revitalize neighborhoods by adding money to your loan for home improvements.
To find out if you qualify, Seamus Murphy - of Guild Mortgage - is answering our Money Watch Q & A lines at 858-2222 from 5pm to 6pm.
For future questions, call 775-200-0155. Guild Mortgage is located at 5390 Kietzke Lane in Reno.
An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. Here's how it works: Let's say you want to buy a home that needs a brand-new bathroom and kitchen. An FHA 203k lender would then give you the money to buy (or refinance) the house, plus the money to do the necessary renovations to the kitchen and bathroom. The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you get decent interest rates (note that the interest rates and discount points will vary by 203k lender, so it's important to make sure that you're getting a good deal on the loan). The downsides are that not all properties qualify, there are limits on the funding you can get and applying for the loan isn't easy. For example, to apply for the loan you may need to hire an independent consultant to prepare the exhibits required (to get the loan, you have to provide a detailed proposal of the work you want to do and cost estimates for each item).