“Good bones.” It’s a phrase that’s used a lot to describe a structurally sound, usually older and somewhat unique home that, to put it gently, needs a little work. Maybe the kitchen and baths need updating. Maybe it could do with an addition. Whatever the case, the FHA’s 203(k) loan program has helped a lot of people purchase, and renovate, homes with “good bones”.
We recently listed a home with “good bones” near Jacksonville University. And a 203(k) renovation loan may make sense for a first time homebuyer, or someone with the vision and know how to bring this home up to date.
First, some things to know about a 203(k) loan:
- It’s Not for investors
Only owner/occupants and certain non-profit borrowers can qualify.
- It’s a single loan
A 203(k) loan is based on what the value of the home will be after renovations are completed. So you can get a loan to cover the purchase price of the home, as well as the renovations (in most cases).
- Condominiums can qualify
You can purchase and renovate a condominium unit using a 203(k) loan. Just note that rehab is limited to the interior of the unit.
- You only need to put 3.5% down
Because 203(k) loans are backed by the FHA, you only need to put down 3.5% of the purchase price and renovation costs combined.
- Regular and Streamlined loans are available
Regular 203(k) loans are available for properties requiring structural repairs. Streamlined loans are available for homes with less intensive renovation needs.
Want to stay in your existing home but need to do some renovations? You can refinance your home with a 203(k) loan to get the funds you need to do the remodel you want.
If you want to learn more about 203(k) loans, there are lots of great resources online:
Read an article from Forbes magazine.
Contact a 203(k) mortgage loan originator (there are many others out there; just Google “203(k) loans”).