Sunday, March 1, 2009

A Brand New Program to Reclaim Foreclosures!

Low down payment, include repair costs, no income limitations.

How many more houses could be sold if buyers could pick a foreclosed property in the neighborhood of their choice, then select their own colors, kitchen cabinets, bathrooms, carpeting & more, and finance all of it in the same mortgage used to purchase the property?

How about if buyers could put less than 5% down, finance most (if not all) of the closing costs, get a great rate and not have to worry about income limitations?

I bet you’re thinking this program sounds almost too good to be true.

Made you look and got you curious though, didn’t I?

The program is not too good to be true. It exists and has been around for quite some time, but it’s remarkably ignored, despite being an almost perfect solution for today’s housing market.

The program is HUD’s FHA 203(k) program. You might have heard of it, but probably forgot about it.

I had to resort to a little bit of hype to get your attention. If the title of this article had mentioned “203(k)”, you probably wouldn’t have read it.

The program though, is a great solution given all the foreclosed properties out there that won’t qualify for a normal mortgage. Many of these properties can be bought for less than 50% of their values, are solid homes just in need of some TLC and are in good neighborhoods.

Here’s a bit more about the program:

- Purchase price + repairs can be included in the loan amount up to appraised value
- Maximum loan amount equals the FHA limit ($297,500 in Detroit, Michigan tri-county area)
- Roofs can be redone, basements finished
- Kitchens & bathrooms can be gutted & redone
- All electrical and plumbing can be replaced, new furnace and central air included
- Appliances can be included
- Driveways and sidewalks are eligible
- A home can be made energy efficient under the program
- What else can you think of?

Many buyers purchase a home ina neighborhood they like, planning on remodeling it later when they can afford it. Why wait? The FHA 203(k) program allows the home to be remodeled now instead of years later.

So, whether you’re a buyer or real estate agent, keep this program in mind when you’re out looking at houses and find one that would be a great purchase if it was fixed up.

1 comment:

  1. Although not directly related to this article, I have stumbled across an article which you and your readers may find of interest. It looks at the current banking crisis and compares it to previous banking crises around the world and looks at the likely effects on the economy based on past information.

    The article is titled The Banking Crisis - Where are we now? and makes for an interesting read.