Your Questions About Fixer Upper Loan
December 5, 2011 · Print This Article
Steven asks…
We have been approved for a FHA loan through Wells Fargo. Should we get a fixer upper or a move in ready home?
Could we use whatever is leftover from the loan for purchasing the house to do some fixing up?
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 70 acre Gold Mining Claim Fiddler Gulch Trib of Josephine Creek Oregon US $3,500.00 |
 PHOENIX AZ TURN KEY CASH FLOW SINGLE FAMILY RENTAL INVESTMENT PROPERTIES US $1.00 |
 Real Estate Investors Complete Turn key US $5,000.00 |
 10 ACRE NEVADA RANCH PARADISE VALLEY MINERAL RIGHTS $195 DOWN $100 MONTH 0 INT US $195.00 |
Landlord Specials answers:
An FHA loan will require an appraisal that includes a "safety" appraisal which means:
1. No chipped or peeling paint
2. No broken or chipped windows
3. No structural issues
I recently tried to buy a home this way and couldn't because of minor window issues and a small area of peeling paint (the seller was not amicable to us fixing it at our cost).
You may not be able to buy a fixer upper through the FHA - and each appraisal will cost you $300-$500 bucks.
Daniel asks…
Can I get a regular FHA Loan on a Fixer upper?
I was contacted today by my lender and was told that I qualify for a standard FHA loan up to seventy thousand dollars. The only problem is, most houses under 70k are fixer upper properties. That is fine with me. I have a degree in architecture and am fully capable to rehab a house. But the issue is that I would not qualify for a 203k loan because of my credit number. Is it Possible to use a Regular FHA loan on a fixer upper property? I know that I would not get extra funding to make repairs. I just want to know if the property would be approved, assuming it would pass inspection.
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70 acre Gold Mining Claim Fiddler Gulch Trib of Josephine Creek Oregon US $3,500.00 |
PHOENIX AZ TURN KEY CASH FLOW SINGLE FAMILY RENTAL INVESTMENT PROPERTIES US $1.00 |
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Real Estate Investors Complete Turn key US $5,000.00 |
10 ACRE NEVADA RANCH PARADISE VALLEY MINERAL RIGHTS $195 DOWN $100 MONTH 0 INT US $195.00 |
Landlord Specials answers:
Real good question - I wish more buyers were aware of this issue.
The short answer: Maybe.
When buying with an FHA 203(b) loan (regular FHA loan), the lender will send an appraiser out to the house to make sure it meets minimum FHA guidelines. That can keep you from buying a "fixer-upper". A common exception to this is buying a HUD foreclosure. Since HUD already owns the house, they will let it go on a regular FHA loan more easily than one that you or I own. Also, they have an "in between" fixer upper loan on these as well - they're FHA 203 (b) With Repair Escrow. That means that the house doesn't quite fit FHA 203(b) standards, but it will require less than $5,000 to fix it up, and it's not structural - so they let the buyer get the 203(b) and the lender also lends them the money for the fix-up, but without all the red tape of the 203(k) deal. Find a local Realtor versed in the HUD homes.
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Josh Dunaway has been a certfied Realtor in the suburban Chicagoland area for over 20 years. Aside from starting his own real estate company, he also owns a mortgage company as well.
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