Septic system issues can really put a damper on your home buying dream. Imagine being a real estate agent and trying to sell a house that needs a septic system replacement. Or if you're trying to sell your house and it needs work, but you can't afford to make the changes and repair the septic system. Finally: imagine looking at a house you really like, but you find out the septic system in the back yard is having problems. Each of these scenarios is real, and a real pain in the neck. But the pain shouldn't be a deal-killer. In fact, each of these issues can be solved by one mortgage program: the FHA 203k. This home improvement loan can finance the repairs or replacement of the septic system and/or well right into the life of the mortgage. This will help take the sting out of the price!
Explaining the FHA 203k
The 203k has been around since the late 1970's. The Federal Housing Administration decided it was time to take aim at vacant homes, houses in need of repair and renovation-ready properties. So under the Federal Housing Act, the government came up with the idea to help home buyers finance certain home improvement projects into their mortgages, keeping the loans eligible for FHA financing.
This means that you can buy a house in its current condition of disrepair, and make the necessary renovations to have the house livable. You can also find a house you like and make desired improvements to turn into the house you love! Want to know what home improvements are eligible for the FHA 203k? Take a look at the list below for a few ideas.
- Septic system repair/replacement
- Roof replacement/repair
- New windows/doors
- Build or repair a deck/porch
- Wheelchair access/ramps/elevator
- Basement waterproofing
- Add a bathroom
- New appliances
- Painting (interior or exterior)
- Much more!
The great thing about the FHA 203k is that the cost of the repairs can be rolled into the cost of the mortgage, so it's amortized over the life of the mortgage loan. This means you get to include the interest you pay in you tax write-offs. Plus, the cost works out to be about $6 more per month for every $1,000 you spend on improvements.
If you're interested in learning more about the FHA 203k and other home improvement loans, download the free guide below.
(septic mess photo: Affordable Pumping Services)