Buying a Fixer-Upper Home

With this type of loan, you may benefit from lower interest rates and costs associated with repairs and modernization as compared to financing repairs through other methods such as:  

• Home equity lines of credit (HELOCs)
• High-interest credit cards 
• Personal loans 

El interés que pagas sobre tu hipoteca puede ser deducible de impuestos, y las reparaciones no se extienden a lo largo de meses o años. Uno de los beneficios de un préstamo para rehabilitación 203k es que los propietarios pueden personalizar la vivienda para satisfacer las necesidades individuales y su propio estilo personal.  

Las mejoras también pueden aumentar el valor de la vivienda y la comercialización de la reventa. Por lo general, la mayoría de los préstamos 203(k) de la FHA implican pasos adicionales, que incluyen tasadores, consultores, contratistas e inspectores, cada uno con costos adicionales. 

Which FHA 203(k) renovation loan do you pick? 

Streamline 203(k) home loans: 

• Let you tap into funds quickly and easily to make less extensive repairs 
• No minimum repair costs are required 
• The maximum repair amount is $35,000 

The cost of renovations can be financed with this program including: a roof, gutters, downspouts, existing HVAC systems, plumbing and electrical systems, flooring, minor remodeling (not involving structural repairs), interior and exterior painting, and weatherization (insulation, storm doors, windows, and weather stripping). 

Major or lengthy repairs and remodeling, like new construction or landscaping, are ineligible. 

Standard 203(k) requires:  

• A minimum of $5,000 in repairs but has no maximum. 
• A Standard 203(k) rehab loan requires a HUD consultant who inspects the property, consults on the repairs and the associated costs, manages the project, and provides a work write-up.

Standard 203(k) repairs include all those eligible with the Streamline 203(k), as well as certain structural alterations and reconstruction, rehabilitation of garages, modernization of bathrooms and kitchens (including new appliances), removal of health and safety hazards, aesthetic appeal changes, installation of wells or septic systems, and handicapped accessibility improvements.

We’ve all seen them – the countless renovation shows and programs on television. In a couple of weekends, a mold-infested house with leaky pipes, slanted floors and a crumbling foundation is restored with a little hardwood, some painted trim and a whole lot of shiplap and fluffy pillows. Cue the giant dumpster, sledgehammers, and work gloves! No problem – buying a home that needs renovations seems straightforward, right? 

Desafortunadamente, el proceso es un poco más complicado, especialmente para los compradores de viviendas más jóvenes que planean comprar un reparador superior en la vida real. El proceso se vuelve aún más complicado cuando es su primer hogar. 

Below is a list of the top reasons to be thinking about buying (or running away!) from a fixer-upper property, especially if you’ve found a potential home that needs a fair share of TLC.