203K Loans, Saving One Old House at a Time
Have you thought about purchasing a fixer upper and restoring it to its original architectural beauty; Are you a First Time Homebuyer thinking of purchasing a foreclosure which needs many improvements and/or converting a one family into a two family? The 203K loan can make this dream a reality.
It is a great loan product for anyone seeking to purchase and restore /renovate older housing stock and perhaps return a historic property to its original splendor. To be eligible for this type of loan it must be your primary residence.
The 203K loans are available locally through an FHA Mortgage Broker, such as Wells Fargo. Another option is a Conventional Renovation Loan, if it isn’t your primary residence.
The 203K loan provides funds to be used towards purchase and repair/improvement of major systems within the home. This includes roofing, flooring, electrical and plumbing. Additional residential units, can be added up to the existing zoning laws. Even a residential unit, within a commercial/mixed use building, could be renovated with this type of loan.
The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the renovations. Two appraisals are taken of the property; before and after renovations.
This loan product could be used to purchase and rehabilitate a historic property, such as the Bedell house. This NYC Landmark is located at 7484 Amboy Road, Tottenville and was built between 1869-74. It is a foreclosed property and currently available for sale. It is advertised as a fixer-upper with the interior ‘gutted’ . The interior and major building systems could be covered with a 203K loan. Also, since it is a NYC Landmark, a loan from NY State Landmarks Conservancy could be used for an exterior restoration of the porch and siding.
The owners of a ‘soon to be landmarked’ Queen Anne style home located in
before shot of a Tompkinsville home before restoration with 203k loan
Tompkinsville- Fort Hill Section of St. George, used the Wells Fargo 203K Loan to purchase and restore the dilapidated home. Without this loan the renovations would have been daunting. The home needed many upgrades, such as a new roof, new rear porch, plaster repair, siding, electric and plumbing upgrades. It has been lovingly restored with many modern conveniences and is an example of how you can save an old house.
Another type of loan, the Streamline 203K can be taken for smaller renovation projects, under $35,000. An owner occupant can also apply for the 203K within 6 months of purchase, but only if the property was bought without a loan.
after picture notice the siding removed and details added
Finally the home equity line of credit is the most common way an existing homeowner can renovate and/or restore a home. Many homeowners have used this to restore historic homes and add modern comforts at the same time.
As a NYS Licensed Realtor, I encourage anyone thinking of purchasing and restoring an older and/or historic home, to consider the 203K loan.
If you are looking for an older, historic home, whether its a fixer – upper or not, I would be happy to assist you. I may be reached at 718-877-7367 or Angela@SiTreasure.com.