Denver Hud Homes And The 203k Mortgage

Many of our clients have been taking advantage of the 203k mortgage currently available. This is a great mortgage program available to homebuyers who are looking at Denver HUD homes or Denver Bank owned homes that need rehabilitation work.

While there are limitations on the buyer(s) and the property being purchased, these limitations are not overly strict and are still allowing many buyers to purchase homes and earn the 'sweat equity' by doing the remodeling work on their new home.
While there are several nuances to the limitations, I will cover the basics in this article. Let's begin by discussing the limitations on the buyer.

Buyer Requirements for a 203k Mortgage:

The question we receive more than any other is "Can this mortgage be used on an investment property?" While there are several conventional mortgages available for investors, the 203k mortgage can only be used for owner occupants (there are exceptions for government agencies and non-profits). So, if you're looking to buy a home for yourself and plan to live in the home after its fixed up, this is a great mortgage to consider.

The second question we receive from potential buyers is "Can I do the work myself or do I have to hire a contractor?" You can do the work yourself, but you must be qualified to do the work. So if your home needs a new furnace and you plan on putting it in, you need to be a licensed HVAC technician. Because of this, many buyers are limiting their searches to Denver HUD homes that only need cosmetic fixes and few, if any, structural improvements.

Buyers have also been asking us about mortgage rates and terms. Typically, the rates are comparable to a standard FHA loan and you can choose an adjustable rate or fixed mortgage rate.

Property Requirements for a 203k Mortgage:

Once a buyer has determined that they qualify for a 203k mortgage, their first question is "What kind of property can I buy?" Specifically, they want to know if the home has to be a single family house.

The good news is that the requirements for the property type on a 203k mortgage are fairly broad. Good news for anyone looking at the various possibilities in the Denver HUD Homes market. While buyers can use these mortgage for both single family homes and condos or townhomes, there are even more possibilities.

A 203k mortgage can also be used for a multiunit dwelling of up to 4 units. For example, a buyer could use this mortgage to purchase a duplex and fix it up to live in one of the units. In addition, this type of mortgage can also be used to rehab a multi use (mixed use) property. So, if you're looking for Denver HUD Homes that have retail or commercial space too, this could be an ideal mortgage for you.

Keep in mind, there are many details on this program that we don't have the space to go into here. A local, qualified real estate agent or lender can answer more questions. Once you've been pre-qualified, it's time to start looking at Denver HUD Homes to find the right new home for you!