The FHA 203(k) Rehabilitation Loan program may be right up your alley if you are buying a foreclosure as your primary residence. That’s because The Federal Housing Administration (FHA) is encouraging the use of its little known 203(k) loan which allows a primary owner-occupant* to borrow money for both the purchase and renovation of a property all in one loan. And, you only have to have 3.5% of the total purchase price (acquisition and repair costs) as the down payment. In addition, the program can be use to include cosmetic improvements as well as major renovations like replacing a roof or fixing up the properties plumbing or electrical systems.

The thing you must understand about the 203(k) loan program is that completing the application process will require a little more patience on your part. But, if the property is a great buy and needs some comprehensive remodeling to make it just right for you and your family, the additional time and paperwork aggravation may be worth the effort.

When purchasing and remodeling a home under this program, the property value must remain within the county FHA loan limit for the area once the rehabilitation or repairs are completed. The value is calculated by either adding the cost of rehabilitation to the original property purchase price, or as 110% of the appraised property value following rehabilitation, whichever is less. The final mortgage loan amount is based on the projected value of the property with the work completed. The advantage of this type of loan is that you can buy a home that needs a lot of work and you can complete the repairs after purchasing the home.

Full story is available on Find South West Florida Homes