What the BLEEP is a 203k?
So you want to buy a dilapidated home but don’t have the cash flow to fix the property after you purchase the home, what to do… You’re in luck, how ’bout a 203K. Never heard of it? Perfect! Neither have I. But I am pretty sure the United States Department of Housing and Urban Development has.
The program for this loan allows for the rehabilitation of a single family home. What exactly makes a property eligible for this so called program? It just has to have a foundation or so says HUD.
To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.
Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.
Here are just some basic guidelines:
- One Loan = One Closing
- 110% LTV
- All repairs are made after closing
- Qualified buyers
- Down payment assistance programs available
- Examples of improvements made: siding, landscaping, general electrical, painting, etc
With this type of loan you can eliminate major problems before the occur. Also expand the home to fit your needs a little bit better or take advantage to develop a little equity.
So if you still have your eyes on that ripped up foreclosure property but don’t quite think you can front the fix ups, there still might be hope.
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3 Responses to “What the BLEEP is a 203k?”
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great call on featuring the 203k - apart from the reigning blogger at madmortgageworld.com I am also the regional manager for Waterstone Mortgag ein Colorado. A little over 34% of our portfolio is 203k and has been the last 6 months or so…
seriously great niche!
@Daniel - I think there is a greater need for awareness when it comes to the 203K. A lot of people are interested in buying homes that need fixing up but realize they cannot put forth the cash flow to fix them up, so they stop their search before they even begin.
[...] how? Recently I helped a client get into a great opportunity in St. Louis Park which was purchased using a FHA 203k Streamline loan. The area is hot because of the close proximity to downtown Minneapolis and Uptown, without the [...]