Taking on a fixer-upper in San Diego, or anywhere, has traditionally been difficult for people who do not have a lot of cash. Although mortgage loans make home ownership possible for millions of people, they have never been very accomodating to a buyer who needed renovation money, on top of purchase money. With conventional financing, a buyer has to get a first loan in order to buy the home, another loan to finance the cost of repairs and improvements, and then usually a third loan in order to refinance the original two loans at a more affordable interest rate.

The FHA 203(k) loan program was introduced in 1978 for the purpose of rehabilitating the nation’s aging housing inventory. The 203k is one single loan whose amount is determined by projecting the future value of the home (after repairs). This way the buyer rids herself of the need to obtain multiple loans, and pay all the closing costs and fees associated with each. And because it is an FHA loan, insured by the United States Department of Housing and Urban Development (HUD), a buyer can get in with a down payment as low as 3.5%.

Your San Diego mortgage broker or banker can give you even more details, including how to refinance with a 203k!