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What Exactly is an FHA 203(k)?

The FHA 203k Program is a construction loan bundled with an FHA loan that enables buyers to purchase distressed properties as-is, with a minimum down payment.

The FHA’s 203(k) loans range from $5,000 to $35,000, and cover an assortment of projects designed to rehabilitate single family properties. The FHA does not directly lend out the money, but it insures the loan in partnership with a lender.

This enables you to buy a fixer-upper and rehabilitate it for less than you would spend on a house in that would need little work. The best part of the FHA 203K Program is that you gain instant equity after renovations are complete. We also have the plan ready and in place with preapproved properties in our inventory. We can save time and money in searching for all of the details needed to complete the process.

203(k) - How It Is Different

Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made.

When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods.

The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.

Please call us for details 480-559-8607

Some of the information used in the above content is derived directly from the U.S. Department of Housing and Urban Development.

Your Arizona Foreclosure Home Designed Your Way, All Easily Financed!

A good majority of foreclosure homes in Arizona are in need of renovation. Just buying a foreclosure home can be frustrating and scary. There seems to always be something that isn’t quite the way you would like. Sometimes the kitchen needs to be updated or the flooring is all wrong (very common with foreclosure homes). Maybe the landscaping needs a personal touch. Buying a home is usually the biggest investment you will make.

But don’t worry if you’ve never renovated a home before. We will hold your hand. We will assign a project manager for your renovation to help you select customization projects and materials, contractor bids, and even supervise your project on site from beginning to end. This is better than the American Dream!

We begin creating your customized foreclosure home the day we purchase the property. We start with a complete tear down of the kitchens and baths, removing everything and bringing them down to the studs. We then inspect all plumbing and electric and repair and replace anything necessary. Then we move onto the rest of the entire house; remove all flooring, baseboards, interior doors, and all light fixtures.

We create a blank canvas for you to create the customized home of your dreams!

All New, All You…

This is where the fun begins! We will provide design options for your new home to create the look and feel that reflects your lifestyle. The cabinets and countertops are your choice. Pick your brand new appliances! The paint and flooring you choose are a reflection of your personal style.

Since financing will cover your purchase price as well as your renovation costs for your foreclosure home, you don’t have to worry about any additional expense to be put into your home to make it yours. The end result is the satisfaction of living in a home designed by you, for you, as well as ownership of a retail quality home at a wholesale purchase price.

Loans are available to borrowers of all income levels. Flexible credit qualifying and low down payments make this program a vehicle for getting your dreams fulfilled. You can even finance up to six (6) months of mortgage payments!

Please call us for details 480-559-8607