If you have a question you’d like to ask me just post it here.
Your question does not have to be FHA 203K related, it can be general FHA or Conventional questions as well. I receive all comments & questions personally and I will answer your question the best to my ability.
So if you have a question scroll down to the bottom of this page and type your question in the “Leave a Reply” box and press “Submit”
Are you a homeowner looking for a rehab loan to improve your home? Are you thinking of adding an extra room, upgrading your kitchen or bathroom? Or maybe you just need to tend to a few upgrades or make some much needed repairs to your older home. Do you have little equity due to the market conditions or because you just recently purchased? If you answered YES to any of the above then you might want to consider financing your rehab project with the FHA 203k loan.
The FHA 203k rehab loan will help you finance your rehab project from minor repair work to turning your current residence into the home you’ve always dreamed about.
FHA 203K Rehab Loan vs. Conventional Cash Out & Home Equity Loans?
Most rehab loans are usually designed for investors. These loans have much higher interest rates and shorter terms. Standard Conventional (cash out) loans and Home Equity Loans are limited to the amount you can borrow and allow homeowners only to borrow up to 75% of the property value. Which these days, with values dropping homeowners may find themselves short in equity.
In comparison, the FHA 203k rehab loan is designed for a higher loan to value and can even exceed the property’s future value which means very little equity is needed. Along with that the 203k rehab loan is determined by the future value after repairs have been made instead of the property’s current value. It takes into consideration what the new value will be with the money you will be using for the rehab. Read More » »
In case you weren’t sure about this, you are allowed to select your own Contactor and Cost Consultant(if needed) on a 203k loan. Below are some links to where you can find these licensed sources plus additional information to help you.
If you’re interested in the 203k loan and would like to know what additional costs or fees are involved in comparison to other FHA or Conventional loans this may help you.
Here is an approximation of what the loan breaks down to.
Rate difference between the FHA 203K and other loans:
The interest rate is approximately a half percent higher (.5%) so whatever the market is at the time of your shopping, figure that the 203k will be about .5 % higher. (Example instead of 5% it would be 5.5%)
Additional cost differences:
If the total loan amount including improvements are equal to or less than $417,000 then calculate 1%
If the total loan amount including improvements is over $417,000 then calculate about 2%.
In addition calculate about 3.5% on the money needed for just the improvement Read More » »
RISMEDIA, March 27, 2010—(MCT)—The word “as-is” can indeed be one scary phrase. Especially when buying a home in today’s market where foreclosures and short sales that need fix-up work are plentiful.
But a little-known Federal Housing Administration (FHA) loan program that’s been around since 1978 can help take the sting out of “as-is.” Only 219 borrowers took advantage of the FHA’s 203k program in 2009. Not that many lending and real estate professionals are aware of the program, say observers.
Last year, Tom Meyer found a classic Oakland, Calif., home built in 1925 near Mills College he liked a lot. As a short sale it was priced right and about half the original asking price. Trouble was, the place needed some fix-up work—foundation improvements, dry rot work, a new roof over the garage and other improvements.
Recently a costly mistake happened that I thought would be a good idea to share with R.E agents, Sellers and Buyers. As an FHA 203k loan originator I am use to dealing with lots of moving parts and working with all those involved in the transaction. Recently though, to my surprise a transaction fell through that was already approved and over 30 days into the deal. So why did this deal crash? Because it was found out that the person who did the termite inspection was not licensed at the time of the inspection.
Wow!!! That was a first for me but never the less an easy solution. These were my options:
When you’re getting bids from contractors make sure the bid has a good description of the work to be done and a cost breakdown of the materials and labor involved.
If you receive a bid that is vague (lacking work details, labor and material breakdown) it will delay your loan so a clearly written out estimate would avoid any misunderstandings on what is expected and what is involved.
Here a sample of what you should be looking for when receiving a Bid from Contractor.
Join Me For A 7 Part Series With An FHA 203K Cost Consultant
The 203K Cost Consultant plays a significant part of the 203K and is required on all 203K Standard loans.
In this interview I talk to a Hud Certified Cost Consultant. This 7 part series will cover:
The role of the 203K Cost Consultant
What to expect at the inspections
How to avoid mistakes
How to prepare for the 203k process
As well as other insider tips to help you get your loan closed with less stress
Today I came across yet another great post encouraging Real Estate Agents to consider those buyers who want to use FHA financing. As a 203K Mortgage Lender I am trying to do my part in spreading the word that FHA Loans have a lot of benefits that the standard Conventional loans don’t. So read on…you may be pleasantly surprised on how far FHA has come. Read More » »
Videos - This is a sample version of the FHA 203K: 10 Steps from Offer to Closing video. You can see the complete version at the 203k Mortgage Lender website
Articles and Ebooks: In addition to the video we also have the Print Version of the 10 Steps from Offer to Closing. This can be a useful resource when you’re meeting with your Real Estate Agent in the event they aren’t familiar with the 203K program.
The role of the 203K Cost Consultant
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