FHA 203K down payment explained / it's not what you think .....

FHA requires 3.5% of the purchase as the down payment.  The 203K loan differs in that the down payment is applied towards the base loan amount.

Below is a quick and easy presentation to illustrate the difference from a typical FHA purchase to a 203K purchase.  I believe that understanding this program will be a must in the coming year for all realestate professionals for the following reasons.

 What Buyers want is Value. They ALL WANT to purchase a home with:

• A Comfortable Mortgage Payment
• equity already built in (buying below market)
• A home that they can be proud of (features that appeal to them, ie... a large kitchen for instance)

FHA 203K loan the "Godzilla of Storms?" Especially in Maryland.  In what kind of Market would a low down payment renovation loan be tantamount in? hmmm... let's see.....

• foreclosures are on the rise (many homes left uncared for and vandalized)
• low inventory of "move in condition" are creating competition (multiple contracts), leaving the other inventory sitting on the market and growing in numbers on a daily basis. Supply and Demand leveraging towards buyers that use the "K" loan to purchase homes at bargain prices
• many homes that are in "move in condition" need THOUSANDS of dollars for updates or near future repairs or replacements (such as roof, airconditioning system, furnice)

More Reason why buyers are using the "K" loan today......

• Sick and tired of loosing out on their offers
• they finally found a loan officer that knows how to do this loan
• homes in the area that they prefer needs this financing

Enjoy the presentations below.