Talk about creative financing: The folks at REbuildUSA are partnering with Lowe’s and Pillar to Post to help home buyers take advantage of the FHA 203k Home Purchase and Renovation Loan program and streamline the purchase/renovation process. Their goal: to strengthen our economy and help rebuild our communities by enabling more buyers to follow through with their home purchases.
There’s certainly a need for this type of service. In today’s market, with so many distressed properties in need of renovation and repair work –- and so few lenders willing to foot the bill for it –- many home buyers aren’t able to complete their transactions because they simply don’t have the cash to invest in the renovation work that many lenders now require to be completed before that home purchase is financed.
In case you’re unfamiliar with the FHA 203k loan program (and many folks are –- hence, the appeal of this new partnership), it’s HUD’s primary program for the rehabilitation and repair of single-family properties. One thing that’s great about the program is that it provides funds for both the purchase and the renovation of eligible homes packaged into one loan.
With the 203k loan, you can finance everything from adding a bathroom or renovating a kitchen to adding a porch, carport or second story to replacing a heating or cooling system to installing or repairing a well or septic system. (Here’s the list of 203k-eligible home improvements.
Typically, lenders have used the program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. RebuildUSA, however, is a for-profit company that specializes in providing certification and training in the 203k program to real estate professionals (including lenders).
Not surprisingly, there are a number of specific requirements that must be fulfilled when a home buyer chooses the REbuildUSA/Lowe’s partnership (this is a capitalist society, after all). Here’s how it works:

  • The home buyer gets pre-approved for the FHA 203k loan through a REbuildUSA Preferred lender.
  • The buyer’s real estate agent (who can also be affiliated with REBuildUSA) helps the buyer locate and submit an offer on an eligible property. (Here’s more info on properties that are eligible for the 203k loan).
  • The agent or lender (one of whom must be a REbuildUSA member) submits the property information to REbuildUSA, which sends the information to Lowe’s and Pillar to Post.
  • Pillar to Post handles the home inspection, and identifies any improvements that are required and recommended by FHA.
  • Lowe’s schedules a consultation with the buyer to identify the work to be done and select the products that will be used. When the details are finalized, the cost package is submitted to the lender.
  • Once the loan is closed, the home improvement funds are placed in escrow and the renovation begins.

No, this isn’t the easiest way to buy a home, and, no, it doesn’t give the buyer much freedom in choosing whom they work with along the way, but it does do one thing that those of us fighting every day to help people successfully complete a home purchase really appreciate: It provides the buyer who otherwise wouldn’t be able to purchase a property they’ve fallen in love with the potential to do so.

About the Author:
Lisa Broadwater, GRI, CDPE  is a Central Oregon-based real estate professional who specializes in listing and selling homes, especially in Sisters, Tumalo, Redmond and Bend.