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    Special Loans for Fixer-Uppers


    Are there special loans for fixer-uppers?

    If you need a home loan to buy a “fixer-upper” and remodel it, look at the U.S. Department of Housing and Urban Development’s Section 203(K) loan program. The program is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old. Condominiums are not eligible.

    A 203(K) loan is usually done as a combination loan to purchase a “fixer-upper” property “as is” and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan.

    Investors must put 15 percent down while owner-occupants are required to come up with only 3 to 5 percent. HUD requires that a minimum of $5,000 be spent on improvements.

    Two appraisals are required. Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.

    · Is there a Tax Break for a Fixer-Upper House if it’s Historical?

    · Are there Special Loans for Fixer-Uppers?

    · What are Building Codes?

    · How do I find a good Contractor?

    · Is Remodeling worth the Price and Time?

    · How do I look for Fixer-Uppers?


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