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Old 09-04-2012, 07:31 PM
 
63 posts, read 116,101 times
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I am interested in finding a fixer in 77450 zip code that I can have some equity vs. buying a new home and being upside down.

Has anyone had any experience good or bad with this type of loan or lenders that offer FHA rehab loans?

Thanks everyone!
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Old 09-05-2012, 10:13 AM
 
5,976 posts, read 15,270,067 times
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Default No experience from me.... but...

We did something similar for the same reason, we purchased a home using a Hold Back Escrow mortgage. Basically the house was appraised below market value because of it's condition, but just cosmetic work alone brought the house up to par, plus some extras we put in made it appraise more than what what it was selling for. The lender hired an independent appraiser who said that if A,B and C were done to the house, the appraised value would be X.

So, the lender agrees to sell the home, but the money to make repairs/changes is put into escrow times 1.5. So for all the things we had done to the house, we had to put 1.5 the cost into escrow of our own cash. This was the guarantee for the lender.

So, we purchased a home, put 18K into it and got 50K equity in the end, not a bad deal. But I would not do it again, lots of hoops to jump through, deadlines, etc.
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Old 09-05-2012, 11:04 AM
 
Location: Houston area
1,408 posts, read 4,053,873 times
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As long as you are open to the extra work required in a rehab loan, it can be a good deal. Many lenders work with the 203k rehab loan backed by FHA. A client is currently going through it with a foreclosure they are buying, but the home only needs a few items like a/c repair, and some flooring. So it's not a huge pain.
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