203k, HomeStyle, other Low Down Payment option w/ Peeling Paint?

[Eric Helder]

Hi everyone,

I'm a 27-year-old young professional looking at buying my first house (owner-occupied duplex) in the Midwest. I have quite a bit of student debt, but a good credit score (750+) and high annual income. After researching mortgage options, a low down payment mortgage (5% or less) is really appealing (even with mortgage insurance) as it opens up a higher price point, and I've run the numbers extensively and know that it will work for me (plus save me money over my current rent). I have a potential off-market deal on a duplex that looks to be a great deal (and is currently very livable), but needs some TLC (peeling paint on wood siding, etc.), most of which I can do myself. I was pretty much set on an FHA 203k or Fannie Mae HomeStyle loan to bundle some of the major renovation costs (add central A/C, etc.) into the mortgage, but looks like I may run into a few hiccups.

• 1. It appears that FHA loans do not allow for peeling paint. Could I still get a 203k approved if painting was bundled in the mortgage?
• 2. However, I'd much rather paint myself and am very capable of doing it. Any way I could get a 203k for other renovations but do the painting myself?
• 3. It appears the HomeStyle mortgage is less strict, but one reference shows that owner-occupied duplexes require 15% down - can anyone confirm?
• 4. Any other options for a low-down payment loan that bundles in renovation costs, but could be approved on a house with peeling paint (maybe something that is contingent on me painting house within 90 days or something)?

Thanks so much for any advice!