Whether buying a 'fixer-upper' or planning upgrades on the new home you are purchasing it would make sense to look into the Federal Housing Administration (FHA) 203(k) loan program. Under this program borrowers are able to combine the cost of purchasing a home that needs renovations with additional money to cover the remodel.

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This arrangement works for both the lender and the borrower, as it provides a more affordable option with better terms for the home buyer while giving lenders the extra security of the FHA backing the loan. When looking at an FHA loan in Texas, remember the specific rules on what properties are eligible for funding.

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Eligibility is not difficult and the following categories of improvements will typically qualify:

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• installing new flooring,

• replacing roofin and replacing or installing gutters and downspouts,

• improving the sewer or plumbing system,

• landscape improvement,

• improvements to the home that improve its overall energy efficiency such as energy efficient windows and doors, kitchen and kitchen appliance upgrades, air conditioning and heating system upgrades and also typically eligible are

• improvements needed to provide ADA-compliance (Americans for Disability Act) including widening doorways in the home, access ramps or people-mover to accommodate second floor bedrooms

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In addition to the usually lower interest rates the loan qualifications are generous with a 3.5% downpayment and first time homebuyers in Texas may also qualify for downpayment assistance.

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