All Things New

Must, mold, curled shingles, broken glass, chipping paint, missing copper pipes, a broken toilet, pet soiled carpets, a furnace that needs replacing and no hot water heater.  No, these are not a few of my favorite things, and I’m guessing they aren’t yours either, but they are a few of the things first time home buyers are seeing when they’re shopping for their first home in Minnesota today.  Particularly when looking at vacant, foreclosed or short sale properties. 

If you’re out looking for homes in today’s Minnesota real estate market, my guess is that you know what I’m talking about and you may very well have checked that home off of your favorites list and sent it directly to the trash in your online property search tool.  Don’t be so hasty!  You can make all things new with an FHA 203K.  An FHA 203K – what, you say? 

An FHA 203K is a buy and repair loan.  You can turn all of the above items and other home repairs into new and finance them along with your new loan at today’s record low interest rates.  If you’re like most first time home buyers, and even move-up home buyers today, down payment and closing costs are enough for you to consider, let alone looking at 10-20K in remodeling costs.  The houses you’re looking at may be right in terms of location, size, layout, but the outdated kitchen, repair items above or down right nasty bathrooms may be turning you away.  Or, it could be as simple as a need for all new flooring.  My husband and I giggled as we were touring some homes last year and encountered a home with a very open floor plan that had wildly different flooring in each and every space.  I encourage you to take a look at the FHA 203K loan as an option that can open up possibilities for you.  

We work with three different types of FHA 203K loans and are experts in assisting you in the FHA 203K process.  It’s a pretty simple process for you as the home buyer:

• Find a house
• Make your lists of wants and needs
• Select a licensed and insured Minnesota Contractor (Or we can recommend one who specializes in FHA 203K’s)
• Get a bid for the repairs
• Negotiate the items you want to complete and accept the bid
• Complete your loan paperwork financing the repairs into the home purchase 
• Start repairs after closing on your new home

Now, there’s a lot of work that goes on behind the scenes in terms of coordination with the FHA 203K contractor, the appraiser, and loan approval, but in simple terms, you work out what you want or need completed in the home, negotiate pricing with the contractor, and we coordinate the rest.  

The three different types of FHA 203K financing we offer:

1. First Time Home Buyer FHA 203K(S) – for first time home buyers to be used in combination with a Minnesota Housing First Time Home Buyer Program with down payment assistance or closing cost assistance.  The repairs done in this loan must be non-structural and cannot include personal property such as free-standing appliances.  Total repair costs must be below $15,000. 
2. FHA 203K(S) – This is a loan for those who have owned a home before or first time home buyers who aren’t using a special first time home buyer program.  You can finance up to $35,000 in total repair costs, and you can include free-standing appliance and any other non-structural home repair or improvement in this loan. 
3. FHA 203K – This loan is for those who are going big in terms of repair amounts or moving walls.  Yes, you can make structural changes with this program and there is no limit to what you can repair.  This loan type also requires the supervision of an FHA 203K consultant, in addition to the FHA 203K Approved Contractor. 

Big jobs or little pesky items, an FHA 203K loan option may be the right choice for you.  To find out more about if this is a viable option for you, contact Carrie Guarrero or start the process online by completing our online pre-qualification worksheet. 

If you are a first time home buyer in Minnesota today and you haven’t learned about first time home buyer down payment assistance and closing cost assistance programs, read more about First Time Home Buyer Programs in Minnesota.  There are a wealth of resources and special first time home buyer programs available today.  If you’re just starting the process and you need to take the mystery out of the first time home buying process, attend one of our Free First Time Home Buyer Classes.  Our next First Time Home Buyer Class is scheduled for Thursday, January 19th from 6:30-8PM.  Register online for January First Time Home Buyer Class now.