If you’ve found the perfect property for your needs, but it’s in need of some repairs, there may be a financial solution perfect for you. An FHA 203(k) rehab loan, also referred to as a renovation loan, allows homebuyers and homeowners to finance both the purchase or refinance along with the renovation of a home through a single mortgage.
By allowing the buyer to finance the cost of improvements into the purchase or refinance of a home, home rehab loans take the financial guesswork and frustration out of renovating a home.
Qualifying for a Rehab Loan:
In order to qualify for an FHA 203(k) home loan, you must meet certain requirements outlined by the Department of Housing and Urban Development (HUD). These requirements include finding a property and that property may need some cosmetic or updating, finding a qualified lender, and meeting all lender requirements, including minimum credit scores, debt-to-income ratios, and proof of income.
Benefits of a Rehab Loan:
Rehab loans are designed to help homeowners improve their existing home or buy a home that can benefit from upgrades, repairs, or renovations. This type of loan has a variety of benefits:
1) Create your own home equity fast by bringing your home up to date
2) Types of homes eligible for a rehab loan are usually listed at lower price
If you’re interested in checking out distressed properties that may be eligible for a rehab loan, contact Metrowest. We specialize in these types of sales and would love to help you start the process!