Home renovations can be daunting, but financing them doesn’t need to be. Homebuyers considering a fixer-upper and homeowners thinking about doing a major rehab work might want to consider an FHA 203K loan.
Often called rehab or renovation loans, 203K loans differ from traditional mortgage loans. Buyers who want to purchase a home in need of repair usually have to secure a loan to buy the property, get additional financing to complete the renovation and then get a permanent mortgage to pay off the interim loans. 203K loans, however, are made based on the after-repair value and include an escrow account, in which the money is dispersed in draws as the necessary renovations are being completed.
Renovation loans can be used in two ways: to purchase an existing home and renovate it – or to pay off existing debt on a current residence and renovate it. The types of improvements allowed on 203K loans are extensive – painting, room additions, decks, bathroom and kitchen remodels, and even going green. Luxury items and improvements are generally not eligible.
Homebuyers need to work closely with their Realtor, lender, as well as a contractor to get a detailed statement about the extent and general cost of the rehab work and the expected market value of the property after the completion of the work. After finding a HUD-approved lender and inspections and appraisals, the work can begin.
For more information to www.hud.gov
Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor
www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.
Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp
National Association of Realtors estimates that the federal government’s economic stimulus plan, along with lower interest rates and other mortgage relief measures, could help trigger 900,000 additional home sales in 2009, compared with conditions in the absence of the stimulus package. The association also expects home inventory to fall below an 8-month supply by the end of the year.
Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor, since 1985
www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.
Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp
Pending home sales are up for the fifth consecutive month, the first time in six years for such a streak, according to the National Association of Realtors®.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in June, rose 3.6% to 94.6 from an upwardly revised reading of 91.3 in May, and is 6.7% above June 2008 when it was 88.7. The last time there were five consecutive monthly gains was in July 2003.
Lawrence Yun, NAR chief economist, said a combination of positive market factors is fueling the gains. “Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” he said. ”Because it may take as long as two months to close on a home after signing a contract, first-time buyers must act fairly soon to take advantage of the $8,000 tax credit because they must close on the sale by November 30.”
November is coming soon, if you’d like to start your home search – contact me or visit my web site and search yourself.
Brian Ripp, CRS, GRI, Broker – your Bay Area Realtor
www.BrianRipp.com serving Fremont, Newark, Union City & surrounding communities. Real Estate & Property Management.
Real Estate Market Weekly Update Webcast: http://realtytimes.com/REUv/BrianRipp
