Hud Purchase. What kind of loan should I apply for?

Question

Real estate agent said to apply for construction loan/verses regular loan to purchase Hud home. A lot of banks don't mess with loans to purchase Hud homes, seems like a hassle. Any thoughts?

Hether Klitzing · Answer

Thank you.

Matthew Porcaro · Answer

You would want to use a 203k loan for this. This loan wraps the rehab cost into your mortgage. It's the best way to kill two birds with one stone.

Ask around your family and friends for mortgage brokers they know. Call each of them up, and ask them if they have DONE 203k loans (most will say they can do them, but very few have actually DONE them). Make sure they have experience actually doing them start to finish. If they're not familiar, it can be a royal pain. Trust me, I dealt with it.

That said, when all is complete, it's the best bang for your buck and a great way to get a property with lots of equity very quickly.

Frank Geiger · Answer

Is the property in pretty bad shape? You can find a million ways to finance it but I think what your realtor is hinting at is the FHA 203 (b) or 203 (k) loan. Do your research on these loans. It is a lengthy process.

Hud Purchase. What kind of loan should I apply for?

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