Those short sales and bank-owned homes may seem like a nice deal, but oftentimes they're cheap because they're less than perfect. So what mortgage should you go with if your new house needs a few touch ups?
If you’re house hunting and in order to save some money you decide to buy a cheaper home, odds are the compromise is that the home might need some repairs (whether minor or major). And Zillow Blog broke down which loan will be best for buyers expecting to make repairs.
The FHA is the regular FHA 203k loan, as well as the FHA Streamline 203k loan program. The latter is for lesser repairs and can be more closely compared to Fannie Mae’s HomePath Renovation loan. Fannie created the HomePath program because it was owning more homes than in the past, thanks to the downturn.
There are some things that are very similar about the two loan programs. For instance, both loan money for the price of the home plus the repairs required. And they both offer up to $35,000 for the cost of repairs (no brand new $75,000 great room here). Although there are differences: the FHA loan requires an appraisal but Fannie does not.
But when it comes down to it, the easiest way to choose a loan is by answering who owns the home
The two the most popular loan programs designed to help homeowners finance needed repairs are the FHA 203k program and Fannie Mae’s HomePath mortgage program. And both programs can actually be broken down further