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Message
Tell me about FHA 203(k) loans for renovating property
Posted on 2/15/17 at 12:01 pm
Posted on 2/15/17 at 12:01 pm
The wife and I found a house that we think is a good deal but is a fixer upper. It was previously foreclosed on, and is now a REO property. As such the REO is selling it cheap to get it off its hands.
Obviously needing to be renovated, the REO is saying it is eligible for FHA 203(k). What are the income/debt requirements, and has anyone used this mechanism to buy a home?
Thanks in advance.
Obviously needing to be renovated, the REO is saying it is eligible for FHA 203(k). What are the income/debt requirements, and has anyone used this mechanism to buy a home?
Thanks in advance.
4
Posted on 2/15/17 at 1:46 pm to NYNolaguy1
I researched it lightly and it seemed to be a big pain the arse so I found a basically move in ready house.
I specifically remember this...there weren't any contractors on the FHA 203(K) approved list within 25 miles of my house and there was only 1 in Lafayette. My first thought was that I needed more options.
I specifically remember this...there weren't any contractors on the FHA 203(K) approved list within 25 miles of my house and there was only 1 in Lafayette. My first thought was that I needed more options.
Posted on 2/15/17 at 2:27 pm to LSU316
quote:
specifically remember this...there weren't any contractors on the FHA 203(K) approved list within 25 miles of my house and there was only 1 in Lafayette. My first thought was that I needed more options.
Thanks, I am looking into this now. That's one half of the two problems I see with this, the other being the lead time between accepting an offer and closing- also find a loan officer who is familiar with the program.
Posted on 2/15/17 at 4:04 pm to NYNolaguy1
I have an offer accepted on a house that will require this loan. Its actually a short sale but needs about $15k of structural work, the current owners tried to make the attic into a room and cut through some beams and what not.
This is the first I have heard about a "contractor's list". I'm pretty new to it also. But I was just told that it had to be a licensed contractor.
Basically you turn in the quote from the contractor, and the mortgage company will loan you the price of the home plus the work.
This is the first I have heard about a "contractor's list". I'm pretty new to it also. But I was just told that it had to be a licensed contractor.
Basically you turn in the quote from the contractor, and the mortgage company will loan you the price of the home plus the work.
Posted on 2/16/17 at 9:59 am to NYNolaguy1
You have to have a contractor that knows how to meet FHA guidelines... just ask.
You can also get an FHA Consultant to go through the renovation process with. He checks off the items as the contractor does the work.
You can also get an FHA Consultant to go through the renovation process with. He checks off the items as the contractor does the work.
Posted on 2/16/17 at 10:05 am to NYNolaguy1
I did one. Never again. Such a pain in the arse.
Posted on 2/16/17 at 11:05 am to I Love Bama
Go here and thank me later: LINK
This guy knows more about 203(k) and how to get the deals done than anyone.
This guy knows more about 203(k) and how to get the deals done than anyone.
Posted on 2/16/17 at 11:16 am to NYNolaguy1
I'm a broker here in BR, FHA 203k is a pain, all my clients that are either buying fixer uppers or gutted homes, I referred them to a few folks that I believe have the best terms on construction loans. they are all doing construction loans and than 45 days from completion we turn them around in refi and put them in a permanent interest rate. I believe this is your best route, call me if you like 225.615.7184 
Posted on 2/16/17 at 2:20 pm to lsu tigerdog
So you are saying you can buy a home with a construction loan, do the remodel, and then turn that loan into a fixed rate long term deal once complete? You are allowed to do that on a house that doesn't qualify for a mortgage?
I didn't realize that was even an option?
I didn't realize that was even an option?
Posted on 2/16/17 at 2:33 pm to I Love Bama
quote:
I did one. Never again. Such a pain in the arse.
Can you give more details. I have an offer accepted on a home that needs about $15k of structural repairs, they tried to add a room in the attic space and cut through some beams.
Its a short sale right now, gonna be a real PITA I can tell. But I only have the offer because its a very good deal and I'm in no hurry to move.
What I don't know is if the home does not qualify for insurance and therefore requires a 203k loan or cash sale than who tells the bank that? Does the bank have to have an independent inspection I'd assume?
Posted on 2/16/17 at 3:07 pm to lsu tigerdog
quote:
a broker here in BR, FHA 203k is a pain, all my clients that are either buying fixer uppers or gutted homes, I referred them to a few folks that I believe have the best terms on construction loans. they are all doing construction loans and than 45 days from completion we turn them around in refi and put them in a permanent interest rate. I believe this is your best route, call me if you like
I would call if I was closer. Unfortunately NYC is a LOT closer than BR at the moment.
I appreciate the advice though. With that said I will explore this route with the credit union we were planning on financing this operation. Is this something that a buyer's agent would help us navigate?
Posted on 2/16/17 at 3:10 pm to baldona
They will make you fix the absolute dumbest shite. If you can afford to pay it out of pocket, just pay to fix the stuff and skip the 203 loan. I'm telling you. It's an absolute shite show.
Just google it and read other peoples experience.
Just google it and read other peoples experience.
Posted on 2/16/17 at 3:38 pm to I Love Bama
The problem I have is I don't have the cash to buy the house outright and it is not going to qualify for insurance right now so its either 203k or nothing? Right?
I don't want to do this loan and i'm not all in on this property, but it appears to be a fantastic deal and I'm sticking with it until something better comes along.
I don't want to do this loan and i'm not all in on this property, but it appears to be a fantastic deal and I'm sticking with it until something better comes along.
Posted on 2/16/17 at 3:40 pm to baldona
I' not trying to talk you out of it. I just want you to be mentally prepared. 
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