But there\u2019s good news. You may qualify for an FHA 203k loan.<\/span><\/p>\n With this type of loan, you can finance the purchase of your home and the cost of repairs into <\/span>a single mortgage<\/span><\/a>. This eliminates the prohibitive amount of time, money, and hassle involved in getting two separate loans. A traditional home improvement loan often has high interest and a balloon payment. Sometimes banks won\u2019t even finance repairs until after the home is purchased, leaving both buyers and sellers in a <\/span>tough catch-22.<\/span><\/a> Section 203k offers a simpler option to allow the purchase and rehabilitation of a property. <\/span><\/p>\n Be aware that 203k does have some limitations, such as <\/span>county-based FHA loan limits.<\/span><\/a> There are also different types of 203k loans. \u00a0A <\/span>Streamlined 203k loan<\/span><\/a> (which requires a much simpler process than a Standard 203k) stipulates that the cost of repairs will not exceed $35,000. <\/span><\/p>\n There are also stipulations regarding <\/span>the contractors that you hire<\/span><\/a> to do the work. Your lender will review the contractor\u2019s credentials and experience. Before granting approval, they will also look at the contract and any estimates. No more than a 50% advance payment is allowed, and there is no allowance made for do-it-yourself projects.<\/span><\/p>\n Single-family homes are eligible for 203k, as well as 1-4 unit buildings. Buildings must be primarily residential to qualify, though in certain circumstances a mixed-use residential and commercial property may eligible. <\/span><\/p>\nLIMITATIONS<\/b><\/h2>\n
POSSIBLE REPAIRS<\/b><\/h2>\n
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