HOW TO BUY A PROPERTY WITH LITTLE OR NO MONEY DOWN –
AND FINANCE REPAIRS
Many people dream of owning property, but the biggest question is:
How do you buy with minimal cash, and how do you finance the repairs?
Let me break it down:
There are several ways to buy a property with little or no money out of pocket:
- 100% Financing:Some lenders offer programs with zero down for qualified buyers.
- 1% Down Programs:These are rare today, but have existed.
- FHA Loans (3.5% Down):One of the most popular low down payment options.
- Conventional Loans (5% Down):Great if you have a stronger credit profile.
- Gift Funds:You can use 100% gift money from a family member or relative for your down payment.
So yes, you can absolutely buy a home even if you don’t have all the money saved up yourself.
Financing Property Repairs – The FHA 203(k) Loan
One of the most powerful tools if you’re buying a fixer-upper is the FHA 203(k) loan.
Here’s how it works:
- You can borrow money not just to buy the home, but also to repair or improve it.
- The repair funds can go up to $75,000or more (based on property value).
- All you need is a contractor’s bid, which the lender reviews and approves.
- The loan closes as one mortgage—purchase + repair costs included.
Yes, the monthly payments and interest rate will be slightly higher, often around 6.875%, depending on the lender and market conditions. But this lets you buy and renovate at the same time.
Refinancing Later
Once your renovations are complete and the property has appreciated in value (typically in 6+ months), you can consider refinancing to:
- Lower your interest rate
- Remove PMI (if applicable)
- Convert to a conventional loan
Making the Right Choice
This isn’t for everyone. Some buyers prefer to do light cosmetic updates using their own savings or credit cards. Others want the full renovation loan upfront to avoid the hassle.
It all comes down to:
- How much work the property needs
- Your comfort level with borrowing more
- Your ability to refinance in the future
If you’re unsure, I’m here to help walk you through your options and guide you to the best solution for your situation.
Let Me Know If You’re Ready
If you’re thinking about buying—or fixing—a home, send me a message. I’ll help you figure out the best financing strategy to make it happen.
Call Me — I’m Here to Help: (415) 225-7920
Manny Kagan,
President,
Pacific Bay Financial Corporation
Your professional mortgage broker since 1983
NMLS #205637
BRE #00874630