As everyone knows, the volume of FHA loans funding first time home purchases has increased dramatically in the past two years.  It went from 3% to about 50% of the mortgage market today.  It is a great product for first time home buyers who want to capitalize on the current first time homeowner tax credit offered by the government.

However, because the down payment requirment is 3.5% of the purchase price, many buyers who use this product often have limited access to additional cash that may be required to address some of those unforeseen situations that sometimes arise when purchasing a home.  This is especially true when they are trying to compete on multiple offer situations and they need additional funds to later for repair work.    From my own experience, most FHA buyers walk away from certain homes they like because they simply do not have funds for repair work.

However, this does not necessarily have to happen.  What their agents are failing to inform them is, there is something called a FHA 203(k) loan which was designed specifically with this type of need in mind.   The 203(k) is a repair program which can be rolled into one single loan.  It is the lifesaver for those who want to buy a home that may require repair work.

I am a real estate expert, so I will not get into the specifics of this loan product, but a good loan agent should be able to explain thing in detail about this wonderful product which escapes the radar of many home buyers.  If you are in Silicon Valley and don’t know a good loan agent who can explain this useful product to  you, then contact me and I can set up introductions.