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Repairs On A House With FHA Loan

by Jennifer
(Bloomsburg, PA USA)

I found a house I love that has been foreclosed on. My husband is very handy and has built homes before so the repairs that need to be done are not an issue.

He bought a house several years ago with an FHA loan and was able to do the repairs himself and then have them inspected, but our real estate agent says that with an FHA loan we can NOT do the repairs ourselves and we have to have a licensed contractor do the repairs for us.

Is this really the case? We need to know ASAP so we don't miss out on his house of our dreams.

Thank You

=====ANSWERS=====

Hello there Jennifer;

Thank you for visiting my website and explaining your situation so well and asking your questions.

I love sharing with people and helping them during the home buying process.

I have some good news for you. FHA has a loan program that allows you to both buy the house and do the repairs yourself.

This FHA rehab mortgage program is designed to help you get done what you're looking to do.

Now the big problem will be finding a lender that will do this for you. I'm not surprised your real estate agent does not know of this program.

There are a lot of loan officers that do not know about this loan product.

When I was in the mortgage business, I did these kind of loans. They work in a way that makes it possible to purchase and fix up the home.

However, the only down side to this loan product if you plan to do your own work is the repair escrow part of it.

You have to pay for the supplies and perform the repairs, then get an inspection and they reimburse you the costs.

So, you have to have some cash on the side or credit cards to work this out. You only want to get 2-3 draws at the most so you have to plan it out.

The type of loan you want to ask for is the FHA 203K loan. It is different from the FHA 203B loan product.

You may have to search rather hard to find this kind of a loan. Many people will tell you they do not exists because they are too embarrassed to admit they do not know about it.

So if you follow all the links on this page and read everything over, chances are you will know more than 99% of the Realtors and Loan Officers out there since this is kind of a secret.

I hope you find this helpful. If you do, please pay it forward so other people can learn about my website by "Liking" us in your FaceBook account and giving us a shout out in Twitter. The button just below make it real easy to do. Just be sure you are logged into your accounts before you do this.

Kind Regards,

Jeffrey Ragan

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AC Unit for House

by Laville D.
(Harvey IL USA)

Well I am trying to purchase a home. I'm a first time home buyer so this is new for me. The home listed for $129,900 and I said I will give him $125,000 and he agreed plus he would give me $4,375 back at closing. We had concerns from the inspection report and placed them on the purchase contract and the seller again agreed to take care of them.

Now here is where it gets good, the bank appraisal came back at $106,000.

Now he agreed to put the AC unit in like the first time when we both thought the $125,000 sale price would fly.

Now he says he won't fix anything but the AC unit and paint the cooling duct and we would be responsible for the safety of it meaning if someone stole it after installation.

Now where is the common sense in this because first why would I pay from $3000-$5000 to get it fixed, replaced etc. and how do I insure something I don't own like uh the house?

From my understanding he is liable until the actual purchase and keys are in my hands. What do you think because he's saying it like take it or leave it?

I look at it like this, fix it and sell it and lets move on, if not me then someone else who will complain about a badly damaged garage.

He still loses for six months at $106,000 and still is responsible for the taxes on the house.

What should me and my family do because we also said we would be gone on the 21st of this month help? LOL

Sincerely,

Laville

=====ANSWERS=====

Hello Laville,

I would like to take just a moment and thank you for stopping by my website. I love to meet new people here in my blog and share my knowledge to help them.

This is especially so with first time home buyers. You need a place where you can get unbiased answers from somebody that is not earning a commission for the sale.

With that said, it sounds like you have taken the proper steps by having the home inspection done to determine any defective items with the house.

Looks like you may have discovered several things with the AC unit being the big one.

Now that you know what the bank appraises the home for, this helps you know the real value of it.

Your correct in thinking the seller should just get on with it, but that is where the problem begins. Chances are he does not have enough equity in the property to make the repairs you listed during your negotiations.

If he is selling at a loss, he will not be very motivated to give you seller concessions.

If his attitude is take it our leave it, well that is what you have to consider.

The real question is the condition of the home. Is it in such condition that you can move into it?

Can you get the seller to fix the AC and you take it "as is" for the rest of your request?

You may need to walk away from the deal and start looking elsewhere.

Do you have real estate agents involved in this? If so, they should have been able to help you with the offer price before this would have happened.

Please feel free to ask more questions or respond by using the box just below.

Also, if you don't mind, if you feel my website has been helpful can you pay it forward and tell others about this site by "liking" us in your FaceBook account and give us a shout in your Twitter?

I wish you the best my friend.

Kind Regards,

Jeffrey Ragan

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