Posted by Jimbob on October 10, 1998 at 17:04:48:
It’s more trouble than it’s worth!
Seriously, it’s a program developed by HUD where a borrower can buy a fixer upper and also wrap the cost of fixing up the house into the new mortgage loan.
Sounds great huh? well there’s plenty of pitfalls, I know 4 investors that did it, and they swear they’ll never do it again, too many problems with qualifying like debt to income ratios, down payment based on purchase price or appraise dvalue before or after the house is fixed up, contractor certifications on the house every step of the way, Governemt red tape not releasing funds to continue fixup on time, and so on.
You’re much better off going with a lease/option or owner contract on a fixer, then fix it up, put it on the market and sell it, a lot less headaches and a lot more freedom to do what you want.