Crown Ridge Properties

The purchase of a house that needs repair is often a catch-22 situation, because the bank won’t always lend the money to buy the house until the repairs are complete, and the repairs can’t be done until the house has been purchased. Especially for FHA financing.

There are a couple options in situations like this. You can try to get a 203(k) loan from a lender, but most shy away from these because of risk, or you can try a conventional loan, pay cash, or see if the house can be sold under land contract terms.

Another creative way of still getting FHA financing on a house that needs minor repairs is if the house is not a foreclosure or a short sale, then the current owner may actually allow you to do some repairs in an effort to get financing. An example might be where a deck has no rails and a simple fix would be to install railing so the bank would pass the inspection of the deck. A simple fix like this could easily allow the lender to approve the financing when it comes to safety issues during the bank inspection process.

Either way though, the best first step is to speak to a lender to find out if they can do a 403(k) type loan or offer other suggestions mentioned here. Also, a seasoned Realtor will be able to visually identify most obvious issues that banks consider while showing you a house.

Contact us to speak to a Lender about financing fixer-uppers.

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