Joe's Blog

The Federal Housing Administration has two types of loan programs for distressed homes.  The first program is for homes that are in need of relatively minor cosmetic repairs.  This program caps the total amount that you can increase your loan by $35,000.  The minimum amount of the repairs has to be at least $5,000.  The second loan program is for repairs that are higher in expense.  There is no cap on the amount of the repairs as long as the purchase price plus the repairs are within the loan limits of your particular county. 

Qualifying for these loans is similar to qualifying for any other type of FHA loan.  You need to have a down payment or investment of 3.5 percent of the purchase price.  You must be able to substantiate your income for the past two years with tax returns and W-2's.  If you are self employed, typically you will need a two year history and tax returns will be required.  As with any FHA loans, you can receive a gift for your down payment and closing costs.