Buying A Boise-Nampa Metro Area Foreclosure?

A lot of the foreclosures that are available need some cosmetic work to make them more livable. Many times buyers may overlook these homes even though they are often the best values because of the cost invovled in bringing them up to what they would consider living in.

There are a couple of great loan programs currently available that addresses this exact issue. The FHA 203k streamline and HomePath Renovation Loan. I use a great mortgage lender that can offer both of these programs, and show you the advantages and differences between the two.

I will provide the highlights of both.

 

The FHA 203k And FHA Streamline 203k Loans

Highlights of the FHA 203k streamline loan include:

• It works very similar to a construction loan – it allows you to purchase a home that wouldn’t qualify for FHA financing due to repair work being needed


• The loan amount is equal to the purchase price of the home plus the amount needed for repairs


• FHA 203k streamline program allows for repairs ranging from $5,000 and $35,000


• Qualifying for FHA 203k loans are the same as regular FHA loans


• Repair work cannot begin until loan closes and the money to pay contractors comes from an escrow account set up when the loan closed


• FHA 203k loans require UFMIP and MIP just like regular FHA loans


• Appraisal required


• Currently available for owner-occupied properties

Fannie Mae HomePath Renovation Loan

When the housing downturn began and Fannie Mae started owning more homes than ever before, one of the things Fannie Mae did to help move the homes to new owners was to design the HomePath mortgage program.

The HomePath mortgage program has two different programs within it – the HomePath loan and the HomePath Renovation loan.

For homes that are in need of repairs, the HomePath Renovation loan is the loan program that is often compared to the FHA 203k loan when weighing options.

HomePath Renovation loan highlights include:

• The property must be currently owned by Fannie Mae


• The loan amount is for both the home and the repairs required for the home


• Repairs can be up to 35% of the as-completed value, but not to exceed $35,000.


• Down payment requirements can be as low as 3%


• Fixed or adjustable rates are available


• No mortgage insurance required


• Investment properties or 2nd homes and investment properties are allowed


• No appraisal required

HomePath Renovation Loan Or FHA 203k Loan?

• Is the home owned by Fannie Mae? If yes, it probably makes the most sense to get a HomePath Renovation loan.


• Is the home owned by someone other than Fannie Mae? If so, then your best option is the FHA 203k loan.

 

So before you eliminate a potential home it may be beneficial to weigh a couple of these loan options. The home of your dreams may be just a specialized loan program away.