Buying a Fixer, Damaged, or Deferred Maintenance Home in Orange County

Finding the Money to Buy One of the Great Deals on Homes For Sale in Orange County AND Repair the Damage

You know how discouraging it is to look at great homes for sale in terriffic neighborhoods in Southern Orange County California only to discover that the baseboards are missing, the once Cafe Latte carpet is now black with mold, the kitchen cabinets do not have knobs and the dishwasher is a wading pool?  And do you think in the case of an REO, the bank will pay for any of those repairs??  Well, thankfully there is a loan program available for homes needing repairs that you may be interested in knowing about.  It’s call the HUD 203K and here are some highlights:

• the home must be owner occupied (this won’t work when you buy an investment property)
• property type must be no more than 1-4 units (and you’d have to live in one of the units to qualify)
• renovation must begin within 30 days of close of escrow and be fully completed within a maximum of 6 months
• loan amounts up to $729,000 can qualify
• the value of the property is determined by either the value of the property before renovation plus the cost of renovation or 110% of the appraised value after completed renovations, whichever is less
• luxury items (swimming pools, tennnis courts, barbecue pits, keg-o-rator) and improvements that do not become a permanent part of the property (trampoline, furniture, paintings) are not eligible
• minimum 3% down payment required for purchase transactions
• up to 6% seller concessions allowed for closing costs (and repair allowance??)
• borrowers may finance an interest reserve into the loan amount to make their payments while the renovations are taking place and before they move in so they may not need to make two mortgage payments at once.  (mumbo jumbo – we need to nail this down into a real scenario – check here for further updates)

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