One of the many frustrations I hear from home buyers is in regard to the difficulty in getting home financing.  With all of the government intervention in the lending industry, many lenders have over reacted out of fear of what is coming their way next.  As a result, the pendulum has moved in the complete opposite direction of where it was just a few short years ago.  Before, because of a directive from Congress (mainly Chris Dodd and Barney Frank) that, "all people who want to own a home should be able to," mandated the secondary investors (Fannie Mae and Freddie Mac) to buy questionable high risk loans and created the serious mortgage default  mess.  Now, most lenders are afraid of their own shadow and are living in fear of making a mistake so they have abandoned all common sense and are expecting all people to fit into a very narrow set of parameters to obtain a loan.  Hog wash!  Since when do all people fit into the same categories?

Fortunately, there is a relatively new loan program available that can offer some relief.  It is called the FHA 203K.  It has been around for a long time but was mostly considered as a loan to use in buying fix up type properties.  Now, with the large inventory of bank owned and distressed homes available, it is coming to the rescue for many potential home buyers as a way to help them take advantage of today's low interest rates.  I have included a brief explanation about it that I got from an excellent lender friend of mine, Joycelynn Predovich at Lime Tree Lending.  Enjoy.

FHA 203K Facts

With the FHA 203K loan

* inspection issues can disappear

* low appraisals can be increased by 10%+

* allows your clients to customize their home leveraging the banks money, rolling in up to a loan amount of $406,250. Client could buy a house for 200k and roll in 200k in renovation, repairs, etc

* NOT ONLY FOR REPAIRS!! Can be used for updates, remodels

* YOUR client could even scrape and rebuild a home

* YOU Close within 30 days

* Yes - even structural issues can be tackled

* Interest rates are at most .25% higher than a regular FHA loan (this would be a difference of 28/mos on a 200k loan)

* can be used in conjunction with first time home buyer programs such as CHFA, CHAC, HUD $100 down, etc

This is a great loan that can be used to purchase that older home in the great neighborhood that needs to be updated.  It offers a wide range of flexibility and easier FHA qualifying rules.

The market IS going to change!  The time to buy is NOW!  Take advantage!