What is the FHA 203k: The But Loan™

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What is the FHA 203k mortgage option?

The FHA 203k is a way to pay for repairs, renovations and home improvements, all within your monthly mortgage payment. It's an option that's great for first time home buyers because many times, that first house is a fixer-upper. While "sweat equity" from do-it-yourself projects is great, rolling in the cost of professional work at about $6 a month for every $1,000 you spend is pretty affordable. In other words, if you want an updated kitchen in your first home and it will cost about $5,000 then you'll only pay about another $30 a month on your mortgage. The additional bonus: because it's in your mortgage payment, you can reap tax break benefits!

Why is the FHA 203k called the But Loan™ mortgage program?

When a buyer is looking for a house, they usually have some deal-breaker items in mind. Maybe it's having a deck on the house. Maybe it's an updated roof, or a certain number of bathrooms. When they see a house that meets most of their ideals except those things, they'll say, "I'd buy this house but..." That's often where the FHA 203k could save the sale.

Here's a list of things the But Loan™ covers so many problems after someone says, "I want this house but..."

• Outdated kitchen
• Paint, flooring and appliance are bad/outdated
• The house needs a new roof
• There's water in the basement (possible mold)
• There's no furnace (this happens sometimes!)
• There's termite damage in the sill plate
• That in ground pool in the back yard needs to be demolished
• The list goes on and on...

If you'd like to learn more about the FHA 203k mortgage option, download the free eBook "The FHA 203k Survival Guide" at the button below.

(old kitchen photo courtesy: Yew Tree House on Flickr)