Many times when buying a bank owned property, the home will “need a little work”. What is the difference between needing a “little bit of work” and needing “a lot of work”?
It depends.
If you are thinking of financing your home with a “normal” FHA loan (not the FHA 203k streamline loan program) it is important to know what things that FHA considers to be cosmetic and what things FHA requires to be repaired prior to insuring the loan.
Here is a brief list of repairs that are not required to be repaired under current FHA guidelines - they are considered to be cosmetic:
- Missing Handrails
- Cracked or damaged exit doors that are otherwise operable
- Cracked window glass
- Defective paint surfaces in homes constructed post 1978
- Minor plumbing leaks (such as leaky faucets)
- Defective floor finish/covering
- Evidence of previous (non-active) Wood Destroying
- Insect/Organism damage
- Rotten or worn-out counter tops - Damaged plaster, sheet rock or other wall and ceiling materials in homes
- Poor workmanship
- Trip hazards
- Crawl space with debris
- Lack of all-weather driveway surface
Does your new dream home need more than just a little bit of work done? The FHA 203k streamline program is designed for situations where the property needs more repairs than what FHA considers “cosmetic” damage and a little bit of work or a lot of work?
Justin McHood is a nationally published mortgage expert who lives and works right here in Arizona. You will normally find him wearing a blue starched shirt (he says that it goes well with is orange hair) and you can learn more about him at ArizonaMortgageTeam.com.
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In the southeast valley, there are currently more than “just a few” homes that are currently either in foreclosure or owned by banks. Some of these properties can be had for a great deal but they will require a little “TLC” before you might be ready to actually live in them.