No doubt you’ve noticed, the housing market is in a slump. Prices continue to fall over much of the country. Financing is a challenge. Sellers are desperate. It seems like a hopeless situation. But what if it isn’t? In this series of posts, we’ll explore how YOU can take advantage of a down market and make it work for you.
Properties in Need of Repair
Look around you, and there is probably a home that has been on the market for a while. It may be empty and in many cases, it’s either been vandalized or was in disrepair to start with. There is opportunity in this property! A 203(k) mortgage may be the start of your own personal economic recovery.
The Section 203(k) program is the Federal Housing Association (FHA) department's primary program for the rehabilitation and repair of single family properties. With this type loan, you can buy a home in need of repair and roll the expense of rehabilitation into the mortgage loan. Still, even after the purchase price and rehab expense, you’re looking at a bargain in most cases. Take this example:
· Home is purchased for a bargain price of $110,000
· The appraiser indicates that, if suggested repairs are made, the home could be worth $160,000
· Repair by licensed contractor is expensed at $15,000
· You have a home worth approximately $160,000 with a $125,000 mortgage
· Instant Equity = $35,000
How can you find these properties? Call your local neighborhood realtor and ask for distressed properties. Getting preapproved and making sure your realtor and mortgage broker are aware of your goal is key.
Would you like more detailed information on this program? Visit http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k.
This blog is written by Niki Davis, a licensed Realtor with Baron Agency in Anderson, SC
Property listings can be found at http://nikidavis.postlets.com
