Purchasing a fixer upper or foreclosure in Knoxville means you are getting a getting a good deal, but with that deal is the price of repairs. Foreclosure website RealtyTrac, states that foreclosures sold at an average discount of 27% compared to non-distressed properties in the first quarter of 2012. A great option for Knoxville home buyers picking up a fixer upper or foreclosure is the FHA203(k) loan. It allows potential buyers who want to purchase a discounted foreclosure but don’t have cash for the repairs to wrap the cost of repairs into their loan.
Eligibility for the property requires that it be purchased as a primary residence, and it must be a one-to four-family residence that has been completed for at least one year.
The maximum loan amount that can be obtained for the property is based on the value or the purchase price of the property before rehabilitation (whichever is less), PLUS the estimated rehabilitation costs (or 110% of the property after improvements, according to HUD).