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Today’s Tampa real estate marketplace is plentiful with foreclosures and short sales. The downfall of these properties is they are sold “as is” and usually in need of repairs. The FHA 203k program may be the loan that will fulfill the Buyer’s needs to purchase the property and perform the renovation that is needed.
FHA 203k is a little known program that has been in existence since 1978 and enables the Buyer to borrow monies to cover the purchase AND any repairs/renovations needed. This Federal Housing Administration loan is federally-insured and allows the costs of the needed repairs to be included in the original loan amount. With the many historic homes in the Tampa real estate market, this program could be beneficial to prospective buyers.
The renovations/repairs with a FHA203k need to be completed within a six month period after the escrow closing. These loans can be used to pay for new appliances, room additions, remodeled bathrooms and kitchens, in addition to necessary repairs such as doors, windows, roof, etc.. The FHA203k allows Buyers to purchase a home in an “as is” situation and complete the renovation before they move in.
An example of how the program can benefit a Buyer:
Last year, John Williams was looking for Tampa real estate when he found a home in the Hyde Park area that was priced as a short sale and was listed as an “as is” sale. Being an old bungalow, it was in need of wood replacement, new roof, window repairs, etc. – but being in the location of other higher priced homes, the home would be well worth the completed project. The FHA203k enabled him to purchase the home for $ 150,000 and roll another $ 100,000. into the property renovations. John was able to buy the property, renovate it to be structurally sound and update the electric, plumbing, kitchen appliances and bathroom fixtures.
With the reduced prices, interest rates at historic lows, and the substantial Tampa real estate inventory available combined with programs like the FHA203k, it is the most advantageous time in recent history to become a home owner.
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