By: Carlos Del Valle, Director de Retail Sales and Delivery Network
Are you dreaming of owning a property that you adore, but it requires substantial repairs, and you’re short on the necessary funds? Well, I’ve got some great news for you! There are currently alternatives available that can assist you in making those necessary repairs to transform the property into a livable space.
You might be wondering how this type of loan works and if it can be used for both property purchase and refinancing. This loan is known as the FHA 203K loan. While it can indeed be used for refinancing, let’s focus on the option of purchasing a property in need of repairs. With this loan, you can acquire a property that requires improvements or repairs and include these costs in the transaction, essentially financing the renovations.
It’s essential to note that, for this type of loan, the property must be used as your primary residence.
Within this product, there are two types of loans: the “limited” option, which allows for up to $35,000 in improvements, and the “standard” option, suitable for larger amounts.
The “standard” alternative, which is the more common choice, covers improvements such as cabinets, doors, windows, roof sealing, bathrooms, electrical work, plumbing, and more. In essence, it encompasses repairs necessary to make the property habitable but does not include rooms, terraces, pools, and other luxury upgrades.
To learn more about this topic or before you embark on your mortgage application process, Oriental is here to provide guidance and assistance. Click here to learn more or give us a call at 787.777.CASA (2272).
