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The FHA 203K loan has been around since the 1970′s however the reason why you don’t hear about a lot of them being done, is either the borrower is aligned with an in-experienced loan officer, who does not want to take on the challenge of additional work and time to close, or you just don’t know about it. And it is amazing, and it is all I do here in the wonderful State of Colorado.

You either PURCHASE or REFINANCE with this loan and here’s how it works:

It’s simple, all you do is roll in the comprehensive repairs that are to be completed by the general contractor and subs in to your loan amount.

A single contractor can coordinate a remodeling of a room, area, or entire home with multiple jobs. Whether you are planning to add a bedroom, bathroom, deck, or maybe a new kitchen, any additional square footage can be all included in to one low interest rate. This interest rate is only between 4.875%-5.625%. Not bad right?

Let me give you an example of a deal I just got done working on. The buyer purchased a home for $290,000 and the home had some problems with the foundation it rested on and it was causing a bunch of other problems.

The FHA HUD Consultant estimates the repaired to be around $110,000, so the new loan amount, which has to abide by FHA County Limits, is maxed at $406,250.

Here is where it gets good. In this particular area of Denver the cost per square foot is a bit over $210 and this property way 2800 sq feet. That means the after appraisal, value can be justified at a whopping $588,000.

Even if the buyer wanted to sell the property in 6 months, he will have an amazing profit of over $180,000! You see? A FHA 203K Loan is the way to go for any fixer upper job whether it be a purchase or refinance.

To learn more about the FHA 203K Loan contact Brian Quigley, Colorado Mortgage Specialist .