Why the Future Looks Bright For FHA 203K

The US Government is stepping up to help regular folks buy foreclosures or short-sale properties that need repair with a limited repair loan program.

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family programs. Bank competition with foreclosures and short-sales has resulted in a great opportunity for real estate buyers who want a fixer- upper.

John Burns Real Estate Consulting identified Phoenix as “the most unique market in the nation,” where affordability was better than at any time since 1981 and buying a house was once again cheaper than renting.”

Those with healthy credit histories can now buy those less expensive homes in need of repairs, and roll the cost of those repairs into the mortgage called a FHA 203K.

“Once this thing turns, it may turn slowly,” Arizona State University business professor Karl Gunterman noted in a recent interview, “But at some point I think its going to pick up because prices are so low.”

How will the FHA 203K fixer-upper loan help buyers before prices increase again?

Up to $35,000 in repairs can now be eligible for addition to the loan amount (up to 110% of the property’s value). Qualifying repairs include, but are not limited to, projects like:

• minor kitchen and bath remodels
• heating and air conditioning systems
• plumbing and electrical systems
• new appliances

It used to be that real estate purchase contracts involving FHA loans were considered a delicate business, because appraisers often insisted on the sellers making silly little repairs or bigger improvements which sellers simply did not want to complete. Now sellers, most of them banks, have less responsibility, while buyers have greater flexibility.

Kendall Matthews has been a helping real estate investors and home buyers purchase Phoenix Real Estate since 2004. Interested in learning more about real estate investing? Visit Kendall’s quick survey at www.InvestmentRealEstateCorner/tell-me-what-you-need.

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