Understanding the 203k Loan

203k loans in virginia beach va, patrick bowler in virginia beach va, the best mortgage companies in virginia beach va, movement mortgage virginia beach vaThe 203k Loan is a great financing option for buyers considering purchasing a distressed property, but only a few Hampton Roads real estate agents are educating their buyers about this loan and its’ tremendous value. The 203k Loan is a product of the FHA and was created to provide buyers with alternative financing for both those homes needing repairs and for properties needing full rehabilitation. Because the 203k Loan is endorsed by the Federal Government Loan Programs, it allows buyers to roll-in the repair costs into a 30-year fixed mortgage with only a 3.5% downpayment, which includes the purchase price and the repair costs.

Who is the Ideal Buyer?

There are two model buyers for the 203k Loan. First, those buyers that have the funds for the 3.5% downpayment but not the reserves to pay for the needed repairs or property upgrades. Secondly, this loan offers a financing option for those buyers, who have the money for repairs but are unable to secure financing because the property condition fails to meet required lender standards.

How Many Types of 203k Loans are Available?

There are two types of available 203k Loans, the Regular Loan and the Modified Loan.

  1. Regular – This type is designed for properties that need structural repairs. Both buyers looking to purchase or to refinancing are eligible.
  2. Modified – Also referred to as the Streamlined 203k Loan, this loan is created for properties that need non-structural repairs. Both buyers looking to purchase or to refinance are eligible.

Are All Properties Eligible?

Although frequently used for short sales and foreclosures, the 203k Loan is not designed only for distressed properties; it can also be used to make upgrades for older or dated homes in traditional transactions. Here are the types of properties that are eligible.

  1. Single-family to 4-family
  2. Owner-Occupied
  3. FHA Approved Condominiums
  4. Properties needing Rehabbing

Another notable positive aspect of the 203k Loan is that in an ideal situation, the complete acquisition cost (Purchase Price + Repairs) is far less than the final appraised value – resulting in instant equity!

If you are interested in purchasing a distressed home or if you are a seller of a home needing updates, in Hampton Roads, contact me for additional information about the 203k Loan. At Movement Mortgage, we always enjoy partnering with local Hampton Roads Realtors and are happy to speak with you or your client directly about this financing option.

the best lenders in virginia beach va, patrick bowler virginia beach va

If you’d like to discuss your individual situation as you prepare to purchase in Virginia or North Carolina, please, feel free to call my cell at 757-652-3999.

Pat Bowler | Market Leader & Mortgage Consultant

575 Lynnhaven Parkway Suite 101 | Virginia Beach VA 23452 | 757-652-3999

Movement Mortgage, LLC is an Equal Housing Lender. NMLS # 39179 | 877-314-1499. Movement Mortgage, LLC is licensed by the “Virginia Bureau of Financial Institutions” Lic # MC-5112. Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. “Movement Mortgage” is a registered trademark of the Movement Mortgage, LLC, a Delaware limited liability company.

NMLS license number 210953

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