One of the challenges in today’s real estate market is that there are first time home buyers who want to buy homes and fix them up. Some of the loan programs for first time home buyers just don’t work. For example the registered vacant homes in St. Paul would not pass an FHA inspection/appraisal. FHA loans are popular once again for first time home buyers.
The City Living programs through the City of St. Paul do have loans that can be used to finance the purchase of a home that needs work, and the work all in one loan. The buyer gets estimates from contractors on how much the repairs will cost, and the loan amount is raised to cover the amount of the purchase and the repair costs. 
The city living program offers other services as well:
Overview of CityLiving
- Home Purchase Mortgage Lending, including
- Combined Purchase and Rehab Mortgage Lending
- Combined Refinance and Rehab Mortgage Lending
- Home buyer Education and Counseling
- Home Improvement Lending
- Mortgage Foreclosure Prevention Program
What are interest rates like these days?
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Finding the right loan to meet your needs is important. With lending industry tighten there standards shopping for just the right loan can be important. Having a deposit is also important for most all loans. Start your search by meeting with a lender to see what they can offer you.
As a rookie blogger realizing all the mistakes that I have made I wanted to say to you that your blog is well done. The information is very relevant(not like my random rants) and easy to follow.
Teresa,
The FHA 203K loan will work for these “fixer-uppers.” Here is a recent example of how the loan can be used:
http://www.foreclosureexpert.info/2008/02/this-one-will-r.html
I wonder how much of the fixer-upper trend is thanks to reality shows about flipping houses? It seems that every time I turn the TV on, there is another show making it appear that transforming a distressed property is as easy as flipping a pancake. I wonder how many buyers end up over their heads? A great loan certainly helps, but the buyer also needs to factor in the inevitable higher-than-estimated costs and additional, incidental expenses of a reno.