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Debt Relief – Insolvency – Bankruptcy Information » Foreclosure Help » can I get a loan for more than the purchase price on a foreclosure home for repairs?

can I get a loan for more than the purchase price on a foreclosure home for repairs?

I would like to buy a foreclosure home in the Madison, WI area. The home is on the foreclosure market for 75,000 but the appraisal is around 130,000. The home needs quite a bit of work and I’m wondering if I may be able to take out a mortgage for around 105,000 so that I can purchase the home and make the necessary improvments? any help or sources would be greatly appreciated. Thanks!

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7 Responses to "can I get a loan for more than the purchase price on a foreclosure home for repairs?"

  1. golferwhoworks says:
    no purchase price only less your down payment
  2. BU says:
    If the home was listed at $75K then you can only get the repair allowance from the seller. You cannot inflate the price to get money back at closing, its illegal.

    You can however get a home equity line of credit (HELOC)for up to 100% of the value of that home. Thats a line of credit so you won’t be charged any interest until you start to write repair checks or whatever you need the cash for against it.

    Good luck in 2009

  3. loanmasterone says:
    You have to check around about a few government loans and some city loans, but yes there are a few loans that will allow you to borrow to repair certain things in your property you are buying.

    FHA has a 105% loan. There are down payment assistance loans from the city and county. There repair loans from the county and city. check with your mortgage broker especially if your mortgage broker handles FHA loans. Of course you have to have a mortgage broker that understand the mortgage programs available to buyers.

    The problem with these loan programs is that you must call and see if your can qualify for them.

    You should check with the City Housing Department in your local city for any such programs.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  4. Noneya says:
    You need an FHA 203K loan.
  5. Brother Otter says:
    The FHA has a loan program where you can roll the estimated cost of repairs into the home purchase price. However, the repair estimates must be from professional firms not your brother in law.
  6. Scott D says:
    If you are approaching this as an investor, you may be able to get what is known as a “hard money” loan for the purchase and renovation of the property. Hard Money lenders are generally private lenders who specialize in loaning money to real estate investors. Generally they will want to limit the loan to no more than 65% to 70% of the after repaired value of the home. So if the home will appraise for $130K after the repairs are done, the maximum loan would be around $85K including purchase and repair funds. A hard money loan is a short term loan, usually 6 months, and the interest rates are very high, usually 15% with some additional fees up front. But using a hard money loan you can get the property fixed up and either resell it or the refinance into a permanet mortage. If you are planning to live in the home, the FHA 203B program may also be a good route to look into.
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