The thought of buying a fixer-upper and turning it into the home of your dreams can sound perfect to some buyers — every inch of the house will be to your specifications! However, often times buyers discover this concept can be more costly than they think. That’s where an FHA 203k loan becomes very beneficial.
An FHA 203k loan is a product backed by the federal government and given to buyers who want to buy a damaged or older home in need of repairs. If you’re considering purchasing a home that needs a full renovations of a kitchen, bathroom or another area in the house, an FHA 203k lender would then give you the money to finance the house plus factor those renovation charges into the loan transaction.
It is just one loan, one closing and one payment for both the mortgage purchase and the funds needed for improvements. Homebuyers looking to take advantage of a low-price home in need of renovations, hoping to expand or update a property to meet their needs, or current home owners wanting to make improvements can all benefit from this program.