This type of loan can help you gain instant equity when you buy – David Reecher
The 203k loan is a specialized renovation or construction loan, backed by the Federal Housing Administration. It is available to both buyers and refinancing households, and combines the traditional “home improvement” loan with a standard FHA mortgage, allowing homeowners to borrow their renovation costs.
Say you want to buy a house owned by a bank obtained through foreclosure, many times the property is in poor shape because it may have been vacant for years, and/or mistreated by the previous owners. Work with an agent who knows how to buy foreclosures and buy at a great price – use the 203K loan and have the property rehabbed before you move in. You then move into a finished house you helped design – and now worth more than your total financial commitment.
The only catch is the contractors who do the repairs must be approved by FHA. A good agent can help you set all of this up.