How to Move a Home Using the FHA Renovation Loan Program

Do you really want a bargain when buying a home? So the FHA renovation loan is the way to buy, save money, and get instant equity in your home.

This exciting renovation loan program allows a borrower to move a home from one location to another, pour a new foundation, and attach the old home to the new foundation.

A few years ago, one of my clients was looking for a house, he was getting frustrated because he couldn’t find a house within his budget that was the size that would accommodate his family.

At the same time that he was looking for a home to buy, a developer in Roswell, Georgia had bought land to build a subdivision. There were houses on the land that needed to be demolished or moved in order for him to complete his project. The houses were in good condition, so instead of demolishing them he decided to give them away, the beneficiary would bear the costs of moving the houses. He donated the houses to a church, this was a smart move for the developer because it was a tax deduction for him.

My client was an active member of the Church and requested and received one of the houses; it was his responsibility to pay for the move. The new problem he faced was not having a place to move the house right away. There were deadlines that had to be met, because the developer had to move the houses in order to start construction.

He started his land search and was having the same problems he had when looking for a house, he couldn’t find a piece of land within his budget that was big enough for the house. On very rare occasions, HUD had land for sale within the Atlanta city limits. He would have to bid on the land and there was no guarantee that he would win the bid. He won the bid and now it was about moving the house from Roswell, Georgia, to Atlanta, Georgia, a distance of about 15 miles.

The mover had been contacted about the move, but they wanted their $9000.00 up front and my client didn’t have that kind of cash. The beauty of the FHA renovation loan program is that the cost of the move can be financed with the loan, it was all about getting the mover to agree to wait for the loan to close to get your money. After talking to the mover and explaining how the renovation loan program worked, he agreed to wait until closing, he also agreed not to take a deposit from my client because the loan program is FHA insured.

The cost of pouring the new foundation, attaching the old house, and repairs after the house was attached was $22,000.00. A 20% contingency fee has been added to the loan in case a problem occurs during the move. There were no problems so 20% was applied to reduce the principal balance.

Once the home was attached, the appraiser was called in to project a value upon completion of the home. The value you forecast was $62,000.00, that was a lot of instant capital for my client.

You need to have a vision when buying a property using the FHA renovation loan program and my client certainly had a vision.

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