Updated:ORANGE COUNTY, Fla. - There are currently more than 4,000 homes in Orange County that are either bank-owned or short sales. The problem is many of them are hard to sell because the previous owners tore them up.
WFTV found a program that could help save Florida's real estate market.
Brady Pevehouse saw a home with potential, so he bought the College Park house for $160,000, and then sunk another $130,000 in for renovations. That's money he never would have been able to get without a special program backed by the Federal Housing Administration.
"The dollar that you're borrowing at, the cost of the dollar you're borrowing at, is phenomenal," he told WFTV.
It's called a 203(k) rehabilitation home mortgage, and it means a buyer can purchase a house with only 3.5 percent down. It also allows a homeowner to immediately make changes to a home by rolling the mortgage and the repairs together into one loan.
"So when you see a house where there's no kitchen or the air conditioning is missing, that's actually an advantage to the customer, because in most cases they're going to get a really good deal on the house and they get a brand new kitchen, brand new appliances," 203(k) instructor Andy Wood explained.
The loan doesn't have to be for a home in disrepair; any house is fair game. Still, most buyers and realtors don't know about the decades-old program, meaning many houses with potential just sit there rotting on the Multiple Listing Service (MLS).
For Brady, the program has put him on the fast track to the home of his dreams, which in this market wouldn't have happened any other way.
Now, the program does require more paperwork and inspections than a normal loan. You can make big changes to a house, like adding on whole new wings, or little things like changing the carpet.