How Can I Buy a Foreclosed or Short Sale Home that Needs Repairs?
It can be very frustrating! You can’t finance a home that is not in “live in” condition and you can’t do repairs on a home until after settlement when you own it. It’s a real life “chicken or the egg.”
The solution is very simple; you can use FHA 203k Renovation financing. This is a type of financing that will give you the funds to purchase the home as well as the costs of the renovations you need. The work is then done after settlement when you are the homeowner. You can use this financing for things as simple as appliances, carpet and paint all the way up to full-blown additions or even to move an existing home to a new foundation at a different site.
“My Real Estate Agent says to stay away from this because they are nothing but problems.”
I run into this all the time. The solution to this is to use a lender who is experienced with this type of financing. Many lenders offer 203k renovation financing but very few loan officers have ever done one and therefore have no idea what problems to anticipate.
An experienced loan officer will know what to look out for. They will have a team of people they partner up regularly with to assure things move smoothly and in line with the deadlines built into a sales contract. There are a few more “moving parts” to this type of loan but experienced renovation lenders can assure that they all function together and make things as smooth as possible. They will take the time to explain to you what can go wrong so you are making confident decisions about moving forward so if something does go wrong it’s not a surprise. More importantly they can tell you when a potential home is not going to work. This enables you to move on and find another one instead of wasting time and money on a problem.
The Renovation Lending Division of AnnieMac Home Mortgage is a specialized group of professionals focused on the need to help rebuild and renovate American homes. Americans currently have a great need to access affordable loans to simultaneously finance and renovate their homes.