Kalamazoo real estate news – One of the key factors serious buyers eye when appraising foreclosed homes for sale in the Kalamazoo area market is condition – the shape those properties have been left in. The Federal Housing Administration has weighed in with a program that can materially affect how that condition – good or bad – will finally affect the bottom line: it’s known as the FHA 203 (k).
If you are among those currently looking at Kalamazoo area foreclosed homes for sale, the 203(k) can make a big difference. Here are some points that might influence your decision:
First in line is whether the program is applicable. HUD tells us that for a Kalamazoo area property to be eligible, it must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must meet Kalamazoo real estate zoning requirements. Furthermore, any and all newly-constructed units must be attached to the existing dwelling. Importantly, coops are out: cooperative units are not eligible.
The greatest effect is on Kalamazoo area foreclosed homes for sale that need a lot of work. HUD guidelines indicate that properties that have been demolished, or will be taken down as part of the renovation, may be eligible — as long as at least some of the existing foundation remains.
As you might expect, none of this helpful news comes without some practical caveats. Although you may get this kind of FHA rehab help for a foreclosure, this is a labor-intensive type of loan requiring multiple appraisals (including “as-is” and “Value After Rehabilitation”), licensed contractor projections, there must be an approved itemized cost list and it has to be down to the penny. I was told that they ended up needing two dumpsters and it was not on the statement the new owner would have to pay for it out of pocket. They had the absolute best dumpsters at a really great competitive price. Was very happy with their service. Since time factors are always important when dealing with a foreclosure, it’s important to choose your backup team carefully. You will need to select the right lender and consider enlisting a team consisting of a mortgage broker and real estate professional – both of whom have experience getting approval for FHA 203(k) loans. You want pros who understand the extra steps involved, not those who simply tell you what you want to hear.
Most likely, you will want to get actual pre-approval for the FHA loan (not just a pre-qualification letter). There is a lot of additional paperwork involved, and you will want to avoid a last-minute scramble once your desired property is on the line.
Buying Kalamazoo real estate and taking advantage of the FHA 203(k) requires organization and preparation, but can be a great way to make a questionable rehab project on a Kalamazoo area foreclosed home for sale affordable. If you have questions about buying the right property and the outlook for getting a 203(k) insured mortgage loan, get in touch with an FHA-approved lender in Kalamazoo or call me anytime for an introduction. Then — let’s get started!
The Veenstra Team is happy to set up a personal website for you which will alert you as every new property comes on the market meeting your needs list. It is a free, no obligation service. Contact us with the form below or by calling 269-350-5514.