This loan has the same criteria as the standard FHA loan with the following exceptions.
• To be eligible for FHA Insurance, the property needs some repairs done.
• The amount of those repairs can not be in excess of $10,000
• The appraisal is done prior to the sale of the property. The appraiser has outlined what repairs need to be done to make the property FHA insurable. He/she has fixed a cost to each repair and included the repair and the cost on a separate page in his/her appraisal. There is no cost to the buyer.
• The cost of the repairs is financed into the loan amount and held by the lender until the repairs are done. The buyer contacts the lender, the lender sends out the FHA appraiser and he/she verifies that the work is done “in a workmanlike manner”. The funds are then released to the buyer.
• Repairs must be completed with 90 days from the close of the loan (the day you get to move into the property).
If you have any questions regarding the 203-B Repair program or the process on buying a HUD Home we are HAPPY to help!