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 Looking to Buy a 'Fixer-Upper'? The 203k Program Can Help Make It Happen

In North San Diego Coastal real estate today's real estate market presents a lot of opportunity for interested home buyers-with the growing supply of foreclosure properties and short sales, there are certainly some great deals to be had.

Some San Diego home buyers find the problem in buying a "distressed" property, however, is that these homes are often damaged due to lack of maintenance or prolonged vacancy. So while the price tag might be right, the investment necessary to make the home livable might just push buyers well beyond their budgets. 

As a member of the Top 5 in Real Estate Network® and the vast experience that comes from serving hundreds of home buyers and sellers needs over the past 21 years, I have access to the latest information on mortgage and financing options. One particular option that is providing hope for many of today's home buyers is HUD's FHA 203k program, a loan that enables buyers to not only secure a mortgage, but receive the funds necessary to improve the home as well.

Here are five facts about the 203k program to help you determine if it might be the right fit for you:

1. The FHA Section 203k program was originally introduced by HUD in 1978 as a program to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements. A simpler version, the Streamline 203k, was introduced in 2005. This version offers less documentation and lower loan fees for renovations that don't exceed $35,000.

2. In today's market, conventional financing, which often requires 20% - 25% down on a home and a perfect credit score, is often hard to come by. However, with less-than-perfect credit and as little as 3.5% down, you can get an FHA loan, such as the 203k.

3. The 203k approval process is a little more complicated than a conventional loan. For example, you're required to secure renovation costs from an established, licensed contractor and deliver a package of the proper paperwork to the lender to secure FHA approval. Make sure you work with an agent-like a member of Top 5-who is well-versed in the 203k program, or who can connect you with a lender that is.

4. The 203k loan is not just for foreclosure or distressed properties. More than 80% of the homes in America were built before 1990-that's over 100 million homes that are 20 years old or older-and almost every one is in need of some amount of repair and updating. The 203k loan, therefore, offers advantages for almost any home purchase.

5. The 203k loan is not just for home purchases but can be used to finance a home improvement, as well!

For complete details on the HUD 203k program, you can visit www.fhainfo.com/fha203k.htm. Please feel free to e-mail me,  if you have further questions, or call Loren Sanders at 760-602-1000  

Check out these available North San Diego Coastal homes that are distress sales  

Another program you may want to consider if you are a home buyer looking for a low down payment option alternative to a FHA home loan, check out HomePath properties. These homes are part of FANNIE MAE's Homepath program, there is also a HomePath Renovation program as well.

The special financing available on Fannie Mae HomePath properties offer benefits that include:

 Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes

Fannie Mae is offering a 3.5% incentive* for buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010. Buyers purchasing properties listed on this site that are closed within this period may receive up to 3.5% of the final sales price for:

• Closing costs;
• The purchase of new Whirlpool® appliances by Fannie Mae; or
• A mix of closing costs and appliances, at the buyer's discretion, up to the maximum 3.5%.

To be eligible for this incentive:

• Offers must be accepted on or after January 28, 2010
• Property sales must close before May 1, 2010
• Buyers must be owner-occupants, investors are excluded

*Lenders may impose their own limitations on the use of the 3.5% incentive, so buyers should consult their lenders for guidance.

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Short Sales in North San Diego Coastal Cities of Del Mar, Solana Beach, Cardiff by the Sea, Encinitas and Carlsbad are likely to rise significantly this year. If you are in the market to purchase a short sale or if you have questions about short short sales in general click here for short sale questions & answers