CENTURY 21: The Gold Standard
Are there programs for fixer-uppers?
Homebuyers who want the money to buy a "fixer-upper" along with a home improvement loan can turn to HUD's Rehabilitation loan program, Section 203(K). The program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.
A 203(K) loan is usually done as a combination loan to purchase a "fixer-upper property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.
Investors must put 15 percent down, while owner-occupants are required to come u p with only 3 to 5 percent HUD requires that a minimum of $5,000 be spent on improvements Two appraisals are required Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.
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