Can You Ask for a Loan Amount Higher Than the Home and Price for Repairs?
In today's market many buyers feel that it is impossible just to be approved for a loan. Asking a lender for more than the purchase price sounds like an impossible dream. It's not. There are still loan programs out there that will be able to help you obtain that needed money.
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FHA 203k
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FHA financing is currently one of the most cost-efficient ways to home ownership. The typically FHA loan requires 3.5 percent down payment from the buyer. The 203k rehabilitation loan differs in that it allows the borrower to get additional funds for home repairs. The buyer is still responsible for the down payment of 3.5 percent. The amount of down payment is determine by using both the purchase price and the dollar amount of the home repairs. All repair work done using a FHA 203k must be done by licensed contractors.
USDA Direct Housing Loans
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The USDA's rural development offers mortgage loans to those with moderate to low incomes who live in USDA-eligible areas. The USDA loan can help you get additional funds for home repairs. As with the FHA loan, the USDA loan also requires all work to be completed by licensed contractors.
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Private Lenders
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When shopping for a mortgage it never hurts to ask the question about getting additional funds for repairs. Many lenders will offer the already mentioned programs, but some offer their own in-house portfolio loans to fit your needs. You are most likely to find these types of lending programs through regional banks or credit unions as they tend to know their markets best and have a vested interest in keeping property values high. Already having a bank relationship with these regional banks or credit unions will increase your chances of finding alternative financing options.
Federal or Community Grants
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Grants can be given to home buyers to help with down-payment assistance or complete home repairs. These programs' requirements and restrictions vary. If you decide to take a grant, make sure that you understand if and when any repayments of the money you receive are required.
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References
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