Help is here to buy fixer-uppers
It is now easier than ever for first-time homebuyers to purchase homes in need of repair and get the extra money needed to improve the home. Delaware State Housing Authority released a mortgage product, the acquisition-rehabilitation mortgage loan, for state residents interested in buying a house that may have been neglected because of foreclosure or short sale.
| Using the loan |
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• Locate the property and evaluate the work it will require
• Find a participating lender • The lender will appraise the property and coordinate the purchase • The lender will close the purchase and fund the loan • The buyer is now owner of the property • Rehabilitation work begins Additional resources will be provided for properties that require more than $35,000 in repairs. The buyer pays 3.49 percent rate for the life of the mortgage including cost of repairs. |
“It gives people the financial flexibility to fix up properties they otherwise might not be able to afford and become a homeowner in the process. That’s a boost to the homeowner, the community and the state,” said Gov. Jack Markell during his Dec. 2 announcement of the product with housing authority Director Anas Ben Addi.
The loan combines funds needed for purchase and repairs of a house into one loan with a very low 30-year, fixed-rate mortgage. Local lenders in New Castle, Kent and Sussex counties work with residents to organize the purchase of a house and provide money through an escrow account for repairs. When repairs are finished, the buyer pays a 3.49 percent mortgage rate for the life of the loan.
Kimberly Grim, district manager at Fairway Independent Mortgage Corporation on Route 1 in Rehoboth, said many Realtors in Sussex County don’t know about the product, so it has not received attention from potential homebuyers.
Grim, a lender for the program, said before the recession, Realtors in eastern Sussex were not interested in loan products because there was no need. Because the eastern part of the county is largely a resort area, buyers are typically purchasing second homes, so they would not qualify for the program.
“They were selling so much property. Times have changed now,” Grim said. There might be more interest in the acquisition-rehabilitation loans, she said, if people knew what they were missing. The loans have helped many buyers in New Castle and Kent counties, where the program has shown substantial success, Grim said.
The product is available to first-time homebuyers, or someone who has not owned their primary residence in the last three years. Some veterans may also qualify. Delaware State Housing Authority offers income and purchase price guidelines to help inexperienced residents considering participating in the program.
To learn more about the acquisition-rehabilitation mortgage product, call Delaware State Housing Authority at 577-5001, or visit DeStateHousing.com
. To speak with a local lender, call Fairway Independent Mortgage Corp. in Rehoboth at 239-5173.
