If you are in the market to buy a house and haven’t heard of FHA Rehab Loans you are missing out! FHA offers a great mortgage option called the FHA 203k. This loan allows a home buyer to buy a home that needs some work, perform rehab or repair work on the house, and roll the cost of the rehab into the original mortgage.
The best part of the FHA 203k is that it also forces you to complete all of the work in a timely manner. When you use the FHA 203k we will introduce you to a variety of qualified contractors who specialize in the FHA 203k Rehab Loan to ensure that your rehab is done according to FHA mortgage regulations and that the work is done in a timely manner.
When you use an FHA Rehab Loan there are 3 types of improvements.
1. Repairs you HAVE to do to make the house livable and up to FHA standards.
2. Repairs you WANT to do
3. Appliances (including energy efficient)
The bottom line is that the repairs you do to your house with the FHA 203k have to be those that add appraised value to the home.
Currently those borrowers who qualify for the FHA 203k may also be able to qualify for the FHA Powersaver Grant. This is a free grant that awards borrowers up to $2,000 towards their closing costs.
See this helpful video below for another explanation of how Rehab Loans work.