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Ft Lauderdale Real Estate News | Wilton Manors Realtors in South Florida


Ft Lauderdale Real Estate News | Wilton Manors Realtors in South Florida


Renovation Mortgages Help Homeowners Repair Properties

An inactive federal mortgage that includes renovation costs has gained popularity in Florida and the rest of the country in distressed sales in which many homes often need repair or need appliances replaced. In 2007, when the real estate market was began its decline, 23 borrowers in the state of Florida took advantage of this renovation loan or 203 (k) mortgages. Based on information from the Federal Housing Administration, more than 1,000 Florida buyers financed their properties using these renovation loans over the last 11 months.


The national director of the 203(k) mortgages in New Jersey indicated that 203(k) loans weren’t only taken out by those who purchased homes with extensive damage. The large amount of distressed properties on the market has driven those with decent properties to seek out repair mortgages simply because the home hasn’t been properly taken care of.

The loans are based on the estimate that renovation can account for an additional 4% to 12% on the value of a property. According to information released by the U.S. Department of Housing and Urban Development, the amount of 203(k) in the United States has increased drastically from 3,383 in the year of 2007 to 21,297 in 2011. The amount of these loans is projected to increase to over 37,000 by the end of this year.


The funds allocate into the mortgages can be used for a large variety of renovation tasks such as replacing flooring, updating roofs, plumbing , painting, replacing or purchasing new appliances, and also remodeling bathrooms or kitchens. If you’re looking to add an additional room to the property, this can be financed as well. While it’s true that renovation loans surpass the market value of a property, they aren’t the same as equity loans that homebuyers were signing up for prior to the housing market bubble in 2007. At this point in time, it wasn’t uncommon for home buyers to borrow more money than the property was worth.   One of the most noticeable ways that renovation loans contrast in comparison to equity mortgages is that contractors are required to have all cost estimates approved before the loan is approved. Appraisals and inspections are put into place to make sure that all renovations made to the property will improve the state of the home and the value as well.  When these loans were originally introduced many applications were in limbo based on this aspect but now less than 30 loans are still in the processing stage in Orlando.


More potential homeowners have shown interest in these renovation loans due to the large amount of foreclosed properties on the market that have not been properly taken care of. This was due to the rise and fall in home values when there was an influx in home purchases until the market declined and many of these home owners couldn’t afford to keep or maintain these properties. Many distressed properties have sat empty for multiple years and as a result many homes we’re maintained or have been broken into.  Homes in these states may have scared away buyers in the past but the

203(k) loan gives these properties a second chance.


Attaining a 203(k) mortgage loan will entail a 3.5% down payment and features higher interest rates at roughly 1-3 quarters of a point higher than customary mortgage loans. Mortgage experts state that the interest rates are more reasonable by financing improvement and buying necessary appliances with credit.  These loans haven’t been openly accepted by all since they add the aspects of construction financing which isn’t required with a typical home loan.


Listen to our Mortgage advisor and the Real Estate Roundtable Contributor, Lynn Whitefall of GoldStar Financial. Lynn serves all of Florida, her office in Coral Springs. She often introduces the 203(k) loans to our buyers.


You can reach the Henri Frank Group at REMAX Preferred in Fort Lauderdale, Wilton Manors, Hillsboro Beach and Plantation. Fort Lauderdale Realtors, Frank Vigliotti and Henri Vezie are prepared to help people who are selling their real estate, buying a home in South Florida or investing in Real Estate in South Florida. If you need a short sale, you’ve found the Certified Distressed Property Experts who can help you get the task accomplished. Contact the group by email, or by phone 954-604-9999.


When you purchase a foreclosure home, short sale home or any home that needs repair, check out the 203(k) loan also known as the Repair Loans. And discover that there are mortgages for distressed properties, yes there are mortgages to buy a foreclosure property here in South Florida.


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