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When damages to an REO, foreclosed, or short sale property stand in your way of obtaining a Winter Haven mortgage, consider a 203(k) home loan.

Roughly 50 percent of the homes for sale in the Winter Haven, Florida area are foreclosures or short sales.  Too often, these homes are passed by because of minor, to not-so-minor damage, and buyers are unsure they can secure finance for the home purchase AND the home repairs.  What’s more, most lenders only provide permanent financing, and normally require improvements to be completed before funding long-term loans.  Section 203(k) rehab loans were designed to address this situation.

A Brief Overview of the 203(k) Loan

Using 203(k) rehab loans, home buyers can obtain just one single mortgage to cover the cost of both the acquisition and the rehabilitation of the home they are buying.

In order to provide funds to cover the home’s purchase and rehabilitation, the mortgage amount is based on the projected value of the property (after repairs), taking into account the cost of the work.

To keep the risk to the mortgage lender at a minimum, 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 and can breath relatively easy.

What Properties are Eligible for for 203(k) Rehab Loans?

According to the HUD website, 203(k) rehab mortgages may be used to purchase any one to four-family home  – so long as it’s a minimum of one year old.   The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible.

Interesting Fact: Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place.

In addition to typical home rehabilitation projects, this program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling.  Alternatively, it’s acceptable to convert an existing multi-unit dwelling into a one to four-family unit.

It is possible to move an existing house (or modular home) onto the mortgaged property.  The only stipulation here, though, is that loan proceeds won’t be released until the new foundation has been inspected and the home has been properly placed and secured to the new foundation.

If you’re looking at foreclosed, bank-0wned, or short sale property, but are concerned about the repairs needed in order to get the home into livable condition, the 203(k) rehab loan just might be your answer.  Not only can you get a mortgage for the property, but you’ll get enough to cover the repairs required to make it home sweet home.

Interested in getting a 203(k) rehab loan?  Call me at 863-604-3019 or apply online, and we’ll get you set up!

Kevin Sandridge The Florida Mortgage Pro Signature Home Funding 410 Laurel Cove Way Winter Haven, FL 33884

Mobile: 863-604-3019 Fax: 888-496-0265 Email: kevin.s@sigfunding.com http://www.floridahomeloanspecialist.com