Loan helps buyers purchase, renovate and move into dream homes - CBS46 News

Loan helps buyers purchase, renovate and move into dream homes

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ATLANTA (CBS ATLANTA) -

The housing market is on the rebound in metro Atlanta. Prices are rising and buyers are having difficulty finding homes to purchase, but there's no need to worry. There is another option - the purchase and renovation loan.

The most common purchase and renovation option is the federally guaranteed 203(k) loan. The loan combines purchase and renovation costs into one loan, giving home buyers today's low mortgage rates, a down payment of just 3.5 percent and an opportunity to rebuild neighborhoods.

Angel Poventud hit a high note when he decided to buy a home in Atlanta's Adair Park neighborhood for $14,000.

The home had been abandoned for 10 years and it cost him about $150,000 to renovate it.

Poventud qualified for 203(k) loan and as a result he received roughly $100,000 to purchase and renovate the 90-year old home on Lexington Avenue.

"I've got a 30-year loan at a 4 percent APR and I'm just paying that off over the life of the loan," Poventud said. "People ask 'are you ever going to move' and I'm like never, never this is my one and only house."

Next-door-neighbor Ian Thompson has plans to do the same thing. He paid $38,000 for an old drug house and he plans to put about $86,000 into the renovation.

"No one has $90,000 to pay a contractor to start working on their house, so getting a loan for that and rolling it in to the mortgage makes it sort of simple," Thompson said.

Thompson said the 203(k) loan is the only reason he was able to purchase the house and become a first-time home buyer.

"I'm really excited that it's only going to get better, like we're picking up steam and the snowball is getting bigger and I imagine in 10 years from now you're going to be doing a lot different story on the neighborhood," Thompson said.

In the city of Atlanta, borrowers may also use up to $15,000 from the NeighborhoodLIFT program towards the purchase and renovation of their home. But not many people are taking advantage of it. Less than 1,000 of the purchase and renovation loans were made in the metro area last year.

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