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With so many foreclosures on the market right now, it is a very exciting time to Buy a home.  Fixer Uppers are those homes that seem like a great deal and only need a little TLC.  But, when buying one you need to do your homework.  As a Mortgage Professional, I have seen some homes that could not get financed due to needed repairs.  So here are my suggestions on what to do to make sure your Fixer Upper Home can get financed: 

1.       Inspection- Any time you are thinking of buying a home, make sure you do an Inspection.  No matter how great of a deal it is, you need an inspection.  Even on a newer home.  A Home Inspector will tell you all the issues or possible issues the home will have.  Let a professional tell you what is wrong with the home, don’t assume.

2.       Get an Estimate for the Repairs- Even if you’re a “Do It Yourself” type of person , get an estimate for the work that needs to be done by a professional.  You may think it is an easy project, but it may really take more work or money.  Don’t take on a project without knowing the cost.

3.       Can the Home get Financed- If the home has a bad roof, foundation problems, etc  the home most likely will not get approved for a mortgage.  Now if the home is a Fannie Mae Foreclosure, you are not required to get an appraisal if you do a HomePath Mortgage.  So by not needing an appraisal the lender will not know or care about the repairs needed.

4.       How to Finance the Repairs-  You can Finance the Repairs for a home with a FHA 203k loan.  This loan will allow you to finance up to $35k in repairs, this includes need appliances, roof, dry wall and many other problems.  This is a great mortgage program and here is more Info on the FHA 203k Loan.  You can also finance repairs on a mortgage for a Fannie Mae foreclosure with a HomePath Renovation mortgage. 

5.       Repair escrow HoldBack- Repair Escrow HoldBack is an option that will allow you to fix the repairs after closing.  The short explanation is: You can close on the home and at closing the title company will collect the money needed for the repairs.  Then after closing they release this money to the contractors once the work is done.  Here is more Info on the Repair Escrow Holdback.

Fixer Uppers can be a great deal, but just make sure you do your home work and know your options before buying one.