Financing a fixer up

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I’m interested in purchasing a home that needs a signifcant amount of repairs, but is technically liveable. THe is obviously rotted boards and window sills on the exterior. THe interior is extremely dated, but it is completely functional. According to the agent, the house will appraise for the sales price as the value is mainly in the lot. I would like to add about 1500 sq feet to the house. I am trying to find a lender that will finance the purchase and repairs, including my 20% down payment. Do you know of a lender that will support this type of loan?


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There are some loan options for fixer-upper homes that allow the borrower to wrap the cost of the renovations into the loan. Here are a few:

FHA Loans – FHA which offers many different types of loans geared toward first home buyers and owner-occupants. They have programs that only require 3.5% down. Be aware, however, that loans with less than a 20% down payment will permanently carry mortgage insurance and their rate is higher than other lenders. Their 203(k) loan program even allows borrowers to wrap renovation costs into their mortgage when they buy a fixer-upper.

HomePath Loans – This is a labeling for loans on all Fannie Mae-owned foreclosure properties. They offer low down payment requirements, no required appraisals and they do not charge mortgage insurance. These loans are available both to owner occupied purchases and investors. The HomePath Renovation Mortgage is available to borrowers who plan on renovating the house.

Answered 12 months ago
12 months ago Ted Rood said:
 

Good points, Simon. Home Path loans are ONLY available to homes listed on the homepath.com website, so check there for available properties.


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