Chicago FHA 203k Renovation loans
At the same time, there are a lot of homes in great neighborhoods that aren’t selling right away. A lot of the time it is homes that are in a good location, but they just don’t show as well. These homes might not have been maintained as well, or they could have outdated features, or maybe there are serious problems that need to be fixed before they can even get financed. These homes tend to have lower sales prices, and less competition from other buyers. These homes are opportunities.
One way to broaden the amount of homes available that are in the right neighborhood, but need to be improved, fixed or updated, is to buy and improve them with a renovation loan. I know what you are thinking, “Coming up with a down payment, plus closing cost fees is already a challenge. How can we afford a renovation?” This is where a Chicago area FHA 203K renovation loan really shines.
With a Chicago area FHA 203k loan, you are getting the money to purchase the home AND the money to remodel the home, all in one loan. This is all accomplished with only 3.5% required for a down payment. Now you can look for a “fixer-upper” knowing that you can turn any home into your DREAM home.
Transcript of video
Peter Thompson Chicago203k interview with Milton Manolas loanDepot National Renovation Manager.
Pete: Hi this is Pete Thompson your Chicago and your mortgage guy and I’m here with my good friend Milton Manolas, the biggest authority on renovations loans that I know, and I want to talk a little bit about something which is a real problem right now. There is a real lack of inventory. If you’re a buyer and you are out there looking for properties, you’ve probably found that there are not enough good quality properties out there and what people are finding is that if a home is in a good neighborhood or its in good location, if it shows well and its priced right, it’s going fast. And those homes are getting multiple offers.
Milton: that’s correct.
Pete: at the same time you’ve got a lot of properties out there that just — basically, you’ve got the fore closed properties – there are still some of them out there – but there are a lot of properties that are just out there they just haven’t been, you know, kind of maintained as well or just maybe it’s something that they’ve got old carpets, old kitchens, old bedrooms. These are not the properties that people are really looking at. With the problem that we are seeing right now Milt, how does it kind of fit— what can a renovation loan do to kind of help with this this situation?
Milton: that’s a great question. We have this conversation with people on how they can use these loans to not only get their offers accepted, but to make sure that they are saving time, right? A lot of people know where they want to live. Part of the buying process is finding the neighborhood you want to be in or the school district you want to be in.
Milton: Or looking for a location close to your work for example, and spending months potentially looking for a home in that area and then getting frustrated because you can’t find one. And as you see in this marketplace with limited inventory, you can’t put yourself in that situation because you will not be able to purchase a home, with all the multiple offers coming in.
Pete: it’s a discouraging thing.
Milton: What these renovation loans allow you to do is to find a home that you otherwise maybe think that I may not be interested in that house. But knowing now that you can make those improvements; carpeting, updating the kitchen, could be simple painting or windows. It could be anything. With an FHA 203k renovation loan you can get that home exactly the way you want it to be. So buy a house and make it your dream house after you’ve bought it right?
Pete: You know, that’s funny because you get so many people that are going to buy a house in good shape, and are going to change it around anyway.
Milton: Exactly. The national average is right around $19,000 that people spend in the first year and the half after purchasing a home. That’s what’s estimated that home owners put into their homes, and that’s a lot of money.
Pete: Especially if they put it on their credit cards.
Milton: it’s going to come from either your savings, your credit cards or your 401K. It’s going to come from one of the three.
Pete: Yeah… exactly….exactly.
Milton: So the solution that these renovation loans bring to the table is giving you more opportunity and allowing you now to look at properties in the market you want to be in, that you otherwise wouldn’t look at. So it does solve a critical problem especially in limited inventory.
Pete: it does and the thing that I think is so great about these types of loans too is that it’s a way for people to build equity up front.
Milton: that’s correct.
Pete: Because by buying these properties that are kind of ugly ducklings, you are not paying the premium price. You are basically able to buy something at a little better value, and again, make it the way that you want it to be.
Milton: that’s correct. You can add square footage to the home, you can build it up, and you can build it out to meet your needs. So when you are adding square footage or making updates or modernizing the home, it quite possibly could add that equity.
Pete: thanks again Milt this again is Pete Thompson your Chicago area mortgage guy. Call me at 630-479-6424 if you have any questions or if we can help in any way at all. We would love to hear from you and have a great day.