Improve Your New Home with 203K

Creative Commons License photo credit: rioncm

“Fixer-uppers,” homes in need of some repair, can be found throughout Chicago real estate. With higher lending rules and reduced home values, problems can result with loan approval in these homes. However, there is a little known federal loan program that can assist you in this situation, and help in beautifying your piece of Chicago.

The Federal Housing Administration (FHA) devised a loan program in 1978 to aid with “as-is” repairs? A well-kept secret, only 219 borrowers utilized this program in 2009. The program is called the HUD 203K.
Often potential homeowners discover their potential dream home, only to realize at inspection that dry rot, roofing, appliances, or other needed repairs are pretty significant. The 203k renovation financing program, permits these costs to be included in the federally-insured loan amount, instead of resulting in the buyer requiring an additional loan for repairs.

The conditions are that work must be done within six months of close of escrow, although the borrowers can add six months of mortgage payments to the end of the loan if they prefer to live in the home while the work is completed. FHA home loans also require certain health and safety standards be met and identifying the repairs before escrow closes. Check here for more details and to see if you might benefit from the 203K.

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