If you are seriously considering a fixer-upper for your new home here is a loan program you should consider. FHA's Streamlined 203(k) program permits homebuyers to finance up to an additional $35,000 into their mortgage to improve or upgrade their home before move-in. To qualify the structure must be a single-family house, more than a year old with one to four bedrooms. With this product, homebuyers can quickly and easily tap into cash to pay for property repairs or improvements, such as those identified by a home inspector or FHA appraiser.

Although you must discuss exact requirements with your qualified lender, a detailed home inspection and/or energy audit must be completed by a qualified professional. The professional must be approved by the lender. Based on the report, the homebuyer can choose which improvements to make.  However, installation of smoke detectors and the upgrading of the heating and cooling system to a more efficient level may also be required.

Then the homebuyer must get bids for the work and establish a firm price with the contractors. The work must meet all FHA standards and requirements. The work must begin within 30 days of execution of the Agreement. The work must not cease prior to completion for more than 30 consecutive days. The work is to be completed within the time period shown in the Agreement (not to exceed six months); the lender should not allow a time period longer than that required to complete the work. The lender will add the repairs amount to the loan.

When the closing is completed, the lender sets up an escrow account for the money to be disbursed to the contractor when all the work in completed. The mortgage payment may be slightly higher, but the energy savings from the improvements usually offsets the difference.

As with all government programs, the 203k program has many rules, regulations and requirements. However, it may be just what you need to get into good housing. As your realtor I can make certain you get with the right lender(s) and make your dream a reality. Give me a call at 402-694-4251 or email me at Marie.Otis@cbshome.com.