203K or homepath reno financing only

[Amie D.]

I had a real estate agent in Albuquerque take me around to see a few properties available there. I saw a foreclosure that looked interesting, but in the description it said that the property was eligible for 203K or Homepath renovation financing only (or obviously, cash).

The house was stucco/flat roof, which is common for that area, and I'm more familiar with wood frame/siding/shingle construction, and since I was just checking things out in a general way, I wasn't doing full inspections. Outwardly I didn't see any major issues, but I thought if a house is 203K or cash only, normally there is something fairly major wrong with it to where it won't qualify for a standard mortgage.

I asked the agent about it, and he just said something generic about the 203K loan helping to pay for repairs, and that in this case he thought it was just for replacing the carpet.

I don't know that I've ever seen a house state financing as 203K or cash only just because it has bad carpeting? Does this seem odd or is that common? Most of the houses I look at need a lot more work so I wanted to check if this was true.

Thanks!