According to a search I did on sellingredding.com there are currently 255 bank owned properties, also known as “REOs” for sale in Shasta County. Whether your a first time home buyer or buying up this means there are 255 bargains out there to choose from and that number is growing as more REOs are released from the banks. Some of these REOs are great deals, however keep in mind some of these homes have not been lived in or maintained in months. Not to mention there could be broken windows, spray painted walls, damaged or missing fixtures, water damage, funny smells, and if you can think of it I am sure it is out there kind of damage from previous disgruntled home owners, vandals, or squatters.
One of the issues of buying an REO is that usually the Bank selling the home sells it “as-is” and is not really gung ho about losing more money on a home they have already lost thousands on! So what that means is that you have to buy the home as it is…broken windows and funny smell included! The problem here is that if you are not paying cash and you need to obtain a loan, a lender is going to require that the home meets minimum safety and health standards and most likely you will have to get these items fixed prior to your loan closing. ZZZZINNNNNGGGGGGGG do you hear that???? Yep that’s your fishing reel going nuts because you just caught yourself a lunker of a ” catch 22″. Why on earth would you put up cash to fix a home you dont even own???? BUT you need particular items fixed, that the bank (current owner ) will not fix, to get a loan. So you might be thinking REOs are really just for cash buyers….wrong!
Let me tell you about a dandy little program called the FHA 203(k) re-hab loan. This loan will allow you to ” have your cake, and eat it too…… while enjoying your new floors, counter tops, and stainless steel appliances!”
The FHA 203(k) is through the Federal Housing Administration (FHA) 203 (k) mortgage insurance program, borrowers can purchase a new home and borrow additional funds to make repairs in the same loan. This loan is a stable financing solution that combines the purchase of the home and the costs of the improvements into one single loan. Some of the highlights of the programs are:
- 3.5% Down Payment on the Purchase price plus improvements
- 30yr fixed at a competitive interest rate
- Up to 35,000 in repairs or upgrades can be financed
- Repairs can be made after the close of escrow
- Roof, gutters and downspouts
- Plumbing and electrical systems
- Minor remodeling, such as kitchens, which does not included structural repairs
- repair/replace/add exterior decks, patios, porches
- Weatherization
- Purchase and Installation of appliances; ranges, refriderators, washers/dryers, dishwashers and microwaves.
- Floors
- Windors and doors
- Existing HVAC system
- Septic Systems and or well repair or replacement
Repairs can be done by a licensed or bonded contractor and the contractor has up to 6 months to complete the work. If you would like more information in regards to this product call Sheila Karlowsky at 530-223-1032.
