Distressed properties can be a great value for buyers in particularly hot markets where traditional homes may not be as affordable. In areas like Denver where home sale prices seem to be ever increasing, adding short sales, foreclosures, bank-owned properties, etc., can help expand the choices for potential homebuyers. Here we’ll check out a few financing options that make financing distressed properties a bit easier.
What’s the first step in checking out these types of properties? Just as with traditional sales, the first thing you’re going to want to do before looking at distressed housing is to get a mortgage pre-approval. This not only shows the sellers you are serious, but it also gives you a realistic idea of what you can spend on a house.
It’s a safe bet that most distressed housing will require some repairs or improvements – these can range from minor cosmetic updates to more significant fixes. The good news is there’s a loan option that can help buyers in this situation. It’s called an FHA 203(k) loan and it is the Department of Housing and Urban Development’s (HUD) primary program for the rehabilitation and repair of single-family properties.
Another incentive for buying distressed properties is the Good Neighbor Next Door Program, which is offered through HUD. Through this program pre-Kindergarten through 12th-grade teachers, firefighters and emergency medical technicians can contribute to community revitalization while becoming homeowners. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return,buyers must commit to live in the property for 36 months as their sole residence.
If you want to check out distressed properties in the Denver area, the first thing to do is get an experienced pro on your side. Contact Metrowest – we specialize in these types of purchases and would love to help you start the process!