Buying a House that Needs Renovation – Look at FHA’s Rehab Loan

For all potential home owners, I wanted to let you know about a little known FHA program that allows you to purchase a home and get renovation funds at the same time.It is called the FHA 203 (k) loan program.

Under this program, an owner-occupant can borrow money for the purchase and renovation while putting as little down as 3.5%.

The program requires that the buyer use licensed contractors.Interestingly, the renovations can be for structural AND cosmetic improvements to the property.

From what I understand the application process is not easy.But, I am hearing that it is worth the time and effort.In 2008, FHA issued about 6,700 of the 203(k) loans.This year, more than 11,000 loans have already been insured.Pretty Amazing!


What is even more amazing would be combining this with the $8,000 First Time Home Buyer Tax Credit and/or the Federal Energy Efficiency Tax Credit (up to $1,500).That would be quite a package.

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