While many people seek to buy homes that are already beautiful and allow them to simply move in and get settled, others are drawn to homes that are in need of some major repairs. While purchasing a so-called “fixer upper” is a great way to save money on the purchase of your home most of the time, you are likely to still require a home loan in order to purchase the property. 

Finding funding for the purchase of a home can be overwhelming, but one option that you do have when purchasing a home that is in need of some repairs is the FHA 203K loan program. Essentially it is the goal of this type of loan to provide for the repair of these house’s issues by adding the amount of the costs into your loan amount. 

Of course, like any other home loan, qualifying for the loan is crucial. You must be employed, and your debt-to-income ratio will be carefully evaluated to determine your credit risk. 

Below are steps you can take in order to qualify for an FHA 203K loan program:

  • Find a Realtor who is helpful and ready to be your ally as you go through this process.

  • Locate a loan officer that is certified in doing this type of loan. It is important to realize that not all lenders handle them, and even fewer individual loan officers has been trained to encounter these issues. Make sure that you hire from a company that is large enough that they have outsourced this work. Make sure also that they are capable of, and willing to, complete all of the necessary paperwork. Small institutions will not be able to handle the process.

  • Find the house. The FHA 203K loan program is designed to provide you with the funding that you need to take care of repairs such as the roof, the siding, and the electrical boxes. The loan funds can also be used to provide for some upgrading or renovation of the property as well. 

  • Once you have had an offer be accepted you will seek bids on the wrk that you want done of the house. An appraiser will have made a determination that the value of the property in its current condition as well as develop a projected value that the property may achieve after it has been fixed up. 

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