Charles Rutenberg Realty Owner Joe Moshe Urges Homebuyers to Take Advantage of 203 (k) Loan Program

PRLog (Press Release) - Nov 19, 2009 -
Joe Moshe, Broker/Owner, Charles Rutenberg Realty, says it would be advantageous for homebuyers to apply for 203 (k) loans for those looking to refinance or fix up their homes. This would not only help the housing market recover but stimulate other parts of the economy as well.

The Federal Housing Administration’s (FHA) 203 (k) loan program was established in 1978 to make it easier for homebuyers to refinance existing mortgages and cover additional costs for repairing single-home properties. It allows homebuyers to take out a single mortgage loan at a long-term fixed or adjustable rate that covers both rehabilitation and purchase or refinance costs.

“The 203 (k) loans will allow homeowners to borrow the money they need to make the necessary improvements on their homes, and it will allow homebuyers to purchase a house that is in a state of disrepair,” Mr. Moshe said. “Instead of having to prove their creditworthiness, homeowners will receive a loan amount based on the home’s value.”
The loan is applicable for one- to four-unit family homes and condominiums. In order to qualify, there must be at least $5,000 in repairs being done on the home. This includes structural alterations and reconstruction, elimination of health and safety hazards, reconditioning or replacement of plumbing, flooring, tiling, carpeting, roofing, gutters and downspouts.

In 2005, the U.S. Office of Housing And Urban Development (HUD) introduced a new 203 (k) Streamline Loan program, which is a limited repair program that allows homebuyers and those looking to refinance to borrow up to an additional $35,000 into their mortgage to fix up their home before moving in. However, if repairs exceed $15,000, the borrower is required to undergo an inspection to determine that all the listed repairs have been completed. HUD granted the additional $35,000, citing the rising costs of materials and homebuyers looking to make their homes more energy-efficient.

In addition to receiving 203 (k) loans, Mr. Moshe said, those looking to buy a home are eligible for the $8,000 first-time homebuyers tax credit or the $6,500 repeat homebuyers credit. These tax credits were set to expire on November 30, but, on November 6, President Obama signed into law a bill that would extend the homebuyers tax credit until April 30, 2010.
“By extending the tax credits and offering the 203 (k) loans, homeownership will become a reality for those looking to buy a house. It will also mean that people will be able to stave off foreclosure,” Mr. Moshe said. “The 203 (k) loans will also help stimulate the local economy as people use the money to purchase new materials they need to fix up their homes. So there will be not just an upswing in the housing market but in the retail market as well.”

For more information, call (516) 575-7500 or visit http://www.crrli.com.