Hey there, it’s me Marvin,
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”
Talk to you soon!
Marvin Hernandez
“Your FHA 203K Mortgage Lender”
www.203kMortgageLender.com
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Related posts:
How long do I have to complete repairs?
Hi Marie,
You have up to six (6) months to complete repairs so advise your contractor(s) regarding the time frames.
I hope this helps, if you have more questions feel free to give me a call (888) 788-9398 x 203
Can I get a regular FHA loan with assited down payment with a 203k to replace carpets and paint rooms and do it in seven to ten days.
Billy Miles asked:
Can I get a regular FHA loan with assisted down payment with a 203k to replace carpets and paint rooms and do it in seven to ten days.
Marvin’s Answer
Hi Billy,
There is no combination of the two FHA loans. You choice is one or the other, which is either a regular FHA loan with no repairs or an FHA 203k with repairs.
As far as assisted down payment, no assisted down payments are available at this time to use in conjunction with the FHA 203k. Although, I can offer you a regular FHA loan with as little as one half of one percent (1/2%) down.
As far as the time frame, a typical FHA transaction will take at least 30 days and a 203K’ transaction will take anywhere from 30 to 60 days
Any further questions let me know.
Marvin
Our broker is having problems finding a company that will accept the 203k part of our loan the seller is getting impatient with giving another extension they want us to close, but the property has MAJOR repairs that cant be done without the 203k WHAT TO DO? In a crunch!!!
Lean asked:
“Our broker is having problems finding a company that will accept the 203k part of our loan the seller is getting impatient with giving another extention they want us to close, but the property has MAJOR repairs that cant be done without the 203k WHAT TO DO? In a crunch!!!”
Marvin’s Answer:
Hi Lean,
To understand your question better, you need to realize there isn’t a 203k part of a loan…it is either a whole 203k loan or it isn’t. So if your broker is looking to find a company to accept the 203k “part” then they won’t find it.
You need to work with a broker/lender who is FHA approved and can do the FHA 203k because most of them can’t or just won’t do them.
As far as what to do…The first step is getting an extension from the seller and explaining to them that a standard FHA or Conventional loan won’t work on a property needing major repairs. Then contact a source who can actually do the 203k loan. For the most part it would be like starting over again unless you already have an appraisal done subject to the repairs needed, contactor bid and if it’s a standard 203k and not a streamline 203k a work write up from the cost consultant. If those items have been done already then that can help the processor along faster if not then it really would be like starting over again which would take anywhere from 30 to 60 days to complete.
If I can be of any help let me know, good luck
How does a General Contractor qualify to perform the repairs and upgrades?
Can a investor use the FHA203K for repairs on a hair they have purchased. I am getting ready to invest in a home. I am doing a Fannie Mae homepath loan and am uunsure about where to get the money for the repairs. So I am kinda stuck in it all at the moment. I consider “hard money” since I am a Realtor and know my way around Real Estate and am in love with viewing homes and knowing what the “GEMS” could turn out to be. I really want to pursue this field. I just need to figure out everything before I make that final call. Thanks for your help…Maggie Edwards Homesmart
Maggie Asked:
Can a investor use the FHA203K for repairs on a hair they have purchased. I am getting ready to invest in a home. I am doing a Fannie Mae homepath loan and am uunsure about where to get the money for the repairs. So I am kinda stuck in it all at the moment. I consider “hard money” since I am a Realtor and know my way around Real Estate and am in love with viewing homes and knowing what the “GEMS” could turn out to be. I really want to pursue this field. I just need to figure out everything before I make that final call. Thanks for your help…Maggie Edwards Homesmart
Marvin’s Answer:
Hi Maggie,
The FHA 203k loan is not for investors, only owner occupied properties are eligible. If your doing a Homepath loan then that means you are buying a Homepath home which owner and non-owner occupied financing is available, with some properties being eligible to finance the repairs. I do have alternative conventional financing for fixer uppers with minimum 20% or more down but nothing as attractive as 3.5% down with repair money included as the FHA 203k.
Good luck, and if you have further questions feel free to contact me
Marvin
Jose Asked:
How does a General Contractor qualify to perform the repairs and upgrades?
Marvin’s Answer:
Hi Jose,
A contractor just needs to have all their licensing, insurance and bonding in place to qualify to do all the necessary repairs & rehab as well as making sure that everything is up to date and in good standings.
Hope that answers your question,
Marvin
We have accepted an offer from the bank on a foreclosure home. They agreed to a 6% concession for closing costs and the down payment. we are trying to finance a 203K loan. The 203K loan officer said that the Bank (seller) cannot pay the down payment. Is this true? And is there any laws or regulations on this. Thank you
Randy Asked:
We have accepted an offer from the bank on a foreclosure home. They agreed to a 6% concession for closing costs and the down payment. we are trying to finance a 203K loan. The 203K loan officer said that the Bank (seller) cannot pay the down payment. Is this true? And is there any laws or regulations on this. Thank you
Marvin’s Answer:
Hi Randy,
Your fine using the 6% for all of your closing cost but the minimum 3.5% down payment must come from your side and not from the 6% your getting from the seller.
Good try though and good luck.
Hi, we are trying to purchase an incredible historical home that is in disrepair, and we were told that only 203k financing would be possible. We have enough cash on hand to put >30% down payment _and_ pay for the required renovations ourselves (~$100k). The house appraised at 20% more than our purchase price. We would be looking to finance ~50% of the appraisal value (~70% of the purchase price). Credit scores are no problem. Income also no problem, & no debt. The property is currently uninhabitable. Is the FHA 203(k) really our only option?
If 203(k) is the only option, is it always a red tape nightmare? There are a lot of bad stories about this loan type, but I love the house, and since it is a historical piece of property we’re looking to purchase it’s not as though I can look around the block until I find another in perfect condition. I want to buy, but from what I’ve heard I’m frankly scared of the process…
I have closed on a home with a 203k loan that requires exterior paint as one of the items. I live in Chicago and no painter will agree to paint the house from November through April. The home is a wood, historic home that needs time to dry after scraping and Chicago is either too cold or too damp during these months.
The lender that we used has stated that there is no provision for extension past 6 months, even though all painters proposals state they won’t perform the work until mid to late spring. Is there any way around this?
LAH asked:
Hi, we are trying to purchase an incredible historical home that is in disrepair, and we were told that only 203k financing would be possible. We have enough cash on hand to put >30% down payment _and_ pay for the required renovations ourselves (~$100k). The house appraised at 20% more than our purchase price. We would be looking to finance ~50% of the appraisal value (~70% of the purchase price). Credit scores are no problem.
Income also no problem, & no debt. The property is currently uninhabitable. Is the FHA 203(k) really our only option?
If 203(k) is the only option, is it always a red tape nightmare? There are a lot of bad stories about this loan type, but I love the house, and since it is a historical piece of property we’re looking to purchase it’s not as though I can look around the block until I find another in perfect condition. I want to buy, but from what I’ve heard I’m frankly scared of the process…
Marvin’s Answer:
Hi LAH,
The only two possible options I have for buyers when purchasing a property in dis-repair, other than the FHA 203k, would be a standard conventional loan that only allows repairs up to $15,000 and there are limitations on what kind of repairs you can do. The other loan available is based off of how much equity you have in the property. This loan is easy to qualify for but the terms are not favorable. This type of loan is also known as a “hard money loan”.
For the most part, the only real long term solution for “owner occupying”
Buyers, as well as Homeowners is the FHA 203k loan. Unless, $15,000 in limited repairs from the Conventional loan option mentioned earlier can
satisfy the minimum requirements requested from the lender.
As far as the FHA 203K, the Red tape usually comes from un-realistic goals, mis-information and lack of knowledge on the program, which then starts things off on the wrong foot. Although the program is not perfect and can have its drawbacks, I think having a good contractor & cost consultant along with patience plus planning, as needed with any type of renovation can really help you cut through that tape.
If you would like more information about the FHA 203K Loan you can download my FHA 203K Buyer’s Guide and take a look at this blog post. I think they will both help you get a better understanding about the 203k and it’s process.
Good luck to you
Marvin
We are a non-profit organization that has utilized the FHA 203k program to rehab +50 properties in the past (1990′s). However, we are unable to locate a lender that offers the 203k to non-profits at this time.
Any suggestions?
Can a borrower use alternative credit with a 203K FHA purhchase?
Bobby Saito asked:
We are a non-profit organization that has utilized the FHA 203k program to rehab +50 properties in the past (1990’s). However, we are unable to locate a lender that offers the 203k to non-profits at this time.
Any suggestions?
Marvin’s Answer:
Bobby,
That makes two of us…because as of now I have no source that will fund 203k’s for non-profit organizations but feel free to check back with me at a later date as this might change.
Good Luck to you!
Marvin
Dennis Asked:
I have closed on a home with a 203k loan that requires exterior paint as one of the items. I live in Chicago and no painter will agree to paint the house from November through April. The home is a wood, historic home that needs time to dry after scraping and Chicago is either too cold or too damp during these months.
The lender that we used has stated that there is no provision for extension past 6 months, even though all painters proposals state they won’t perform the work until mid to late spring. Is there any way around this?
Marvin’s Answer:
Hi Dennis,
Do what you can before the weather gets any worse if not then all you can do is request an extension at the end of the 6 months even though the provisions from the lender say otherwise. If you’re working with a cost consultant they can help you get one. It would seem though something was overlooked, as this should not be of any surprise knowing the area you live in and the work that was going to be done but never the less extensions have been granted even though they
are rare.
Good luck to you!
Marvin
Randy asked:
Can a borrower use alternative credit with a 203K FHA purhchase?
Marvin’s Answer:
Hi Randy,
On the FHA 203k the minimum credit score is 620 but some lenders may even require a score of 660 for loan amounts over the conforming loan limits or if you are financing a Standard 203k.
Although FHA guidelines are open to Alternative Credit, it really depends on the lender whether they will accept it or not. If a lender does allow it they are more likely to accept alternative credit for a regular FHA loan then the FHA 203K.
Good luck to you
Marvin
Hi Marvin,
I got a 203k loan to purchase and rehab my new house. Construction is delayed and I will not be able to finish by the 6-month deadline. What do I do? Can I get an extension somehow?
Don asked:
Hi Marvin,
I got a 203k loan to purchase and rehab my new house. Construction is delayed and I will not be able to finish by the 6-month deadline. What do I do? Can I get an extension somehow?
Marvin’s Answer:
Yes, that is all you can do although it’s not supposed to go pass the 6 months.
Good luck to you.
Marvin
I’m just nervous about telling the lender because they might pull the plug and then we’d be in big trouble. Is there a good way to approach this to be sure the bank won’t hold back the remaining funds in escrow and not let us take any more draws?
Hey Don,
Talk to your cost consultant if you have one because there really shouldn’t be any reason to go beyond the 6 months but if that is what it has come down to then really you have no other choice than to communicate that with your lender.
Good Luck, I hope it works out for you
Marvin
I just found out that these loans exist, but I’m not certain I fully understand them based on the information on the FHA webste. How distressed does a property need to be to qualify for a 203K loan when its a new purchase? We had been ruling out looking at a lot of homes because they would need some updating to be OK. Can it be used to remodel a Kitchen or redo a nasty 70′s avacado Bathroom, if what is there is seriously outdated and not the least bit energy efficient – but still functional? Or does this only work with properties that are not habitable the way they are at the time of acquisition?
Angi asked:
I just found out that these loans exist, but I’m not certain I fully understand them based on the information on the FHA webste. How distressed does a property need to be to qualify for a 203K loan when its a new purchase? We had been ruling out looking at a lot of homes because they would need some updating to be OK. Can it be used to remodel a Kitchen or redo a nasty 70’s avacado Bathroom, if what is there is seriously outdated and not the least bit energy efficient – but still functional? Or does this only work with properties that are not habitable the way they are at the time of acquisition?
Marvin’s Answer:
Hi Angi,
The property does not need to be distressed at all. It can be perfectly livable or habitable to live in currently but yet the property just needs to be updated or remodeled. Making the property more energy efficient is a great use of the program as well as personalizing the property to your own taste. So, by all means stop overlooking those ugly duckling properties and start visualizing your home with a make over with the 203k.
If you haven’t already, go to http://www.203kMortgageLender.com and sign up to download my free FHA 203K Buyer’s Guide as well as listen to an informative webcast interview with a 203k Cost Consultant. I have lots of information there that will give you a better idea what this loan is all about and help you feel more comfortable making a purchase with this kind of financing.
Good Luck to you
Marvin
In one of the posts above you said”For the most part it would be like starting over again unless you already have an appraisal done subject to the repairs needed”.
Ok, so if I have an appraisal already, how long is it good for?
Murf the Surf asked:
In one of the posts above you said”For the most part it would be like starting over again unless you already have an appraisal done subject to the repairs needed”.
Ok, so if I have an appraisal already, how long is it good for?
Marvin’s Answer:
Hey “Murf”,
Starting in 2010 FHA Appraisals will be good for 120 days.
Good luck to you!
Marvin
Hi Marvin,
I’ve done tons of conventional and FHA’s deals but have never done an FHA 203k. Should we have a contractor go out first to give us an estimate before we write up the offer. Buyer is approved for $200k and property is listed at $170K. If we offer full price $170k that still gives us $30k to work with for the repairs.
Stephen asked:
Hi Marvin,
I’ve done tons of conventional and FHA’s deals but have never done an FHA 203k. Should we have a contractor go out first to give us an estimate before we write up the offer. Buyer is approved for $200k and property is listed at $170K. If we offer full price $170k that still gives us $30k to work with for the repairs.
Marvin’s Answer:
Hi Stephen,
Having an estimate from a contractor before writing up an offer would be helpful and is a good idea. Although not necessary as lots of buyers and agents will kind of guess-estimate on what those repair or rehab cost would be then bring in the contractor after the offer has been accepted. It sounds like you’re on the right path and got it covered already so if you have any other questions let me know.
Good luck.
Marvin
Can you send me a list of national lenders who particpate in the 203K program for nonprofits ?
Hi Marvin,
I’ve lived in the house for 2 years, just notice about 203k loan, I plan to make a 2nd unit in up-stair, and add a bath room, kitchen, so I can rent it out. Do I qualify this type of loan? currently I have FHA loan on our 1st mortgage. If I qualify what should I do next?
Jenny asked:
Hi Marvin,
I’ve lived in the house for 2 years, just notice about 203k loan, I plan to make a 2nd unit in up-stair, and add a bath room, kitchen, so I can rent it out. Do I qualify this type of loan? currently I have FHA loan on our 1st mortgage. If I qualify what should I do next?
Marvin’s Answer:
Hi Jenny,
Yes…you can add 2 or more units to your existing property as long as you don’t go pass the 4 unit maximum. That rule also applies to owners looking to downsize to 4 units as well who might currently have 5 or more units.
Whether you have an FHA or a conventional loan it doesn’t matter because the new FHA 203k loan will be paying off the existing loan you currently have and will give you the additional funds for your project.
The next step is to find out how much you would qualify for which can include the new expected rental income from that additional unit your planning to build…which of course will help.
Feel free to contact me when you’re ready to get started.
Marvin, we are investors in the San Fran Bay area. We want to buy a house with our cash plus hard money or transactional funding, and turn around and market it to an end buyer owner/occupier as a 203k fixer. Do you have available hard money lenders or short term transactional fund lenders? We are working with a 203k consultant but have not yet done this type of a deal.
We were considering starting a 203k non-profit but are there still no lenders lending to non-profits?
Catherine asked:
Marvin, we are investors in the San Fran Bay area. We want to buy a house with our cash plus hard money or transactional funding, and turn around and market it to an end buyer owner/occupier as a 203k fixer. Do you have available hard money lenders or short term transactional fund lenders? We are working with a 203k consultant but have not yet done this type of a deal.
We were considering starting a 203k non-profit but are there still no lenders lending to non-profits?
Marvin’s Answer:
Yes, hard money rehab loans are available but they are typically used by investors.
There are Conventional rehab loans also available and these are geared for owner occupied, second homes and investors.
I will have someone e-mail you directly with more information.
In Regards to FHA 203k loans for non-profit organizations, I do have some updated news and they are available!!!
Non-profits who are eliglible, must be an existing organization with a minimum 2 years experience in providing housing for low-and-moderate income persons
Good luck.
Marvin Hernandez
when seeking financing, does the buyers have to go thru a bank or mortgage company that directly offers 203K financing or can they iniciate the loan thru, say, their own local bank who inturn can go thru a 3rd party.
In my area there are no known 203K financers within 60 miles and many buyers are nervous to go to outsiders.
B O A in a city 60 miles away offers it but the local branch is not listed on HUD list of financers as offering 203K financing. Can a buyer go to the local B O A to apply who in turn goes to a larger branch to complete the financing?
Can a bank work with a mortgage company in another area to complete the 203K financing?
Is there somewhere where 203K financers in North Carolina are listed that the HUD listing?
Mark Asked:
When seeking financing, does the buyers have to go thru a bank or mortgage company that directly offers 203K financing or can they iniciate the loan thru, say, their own local bank who inturn can go thru a 3rd party.
In my area there are no known 203K financers within 60 miles and many buyers are nervous to go to outsiders.
B O A in a city 60 miles away offers it but the local branch is not listed on HUD list of financers as offering 203K financing. Can a buyer go to the local B O A to apply who in turn goes to a larger branch to complete the financing?
Can a bank work with a mortgage company in another area to complete the 203K financing?
Is there somewhere where 203K financers in North Carolina are listed that the HUD listing?
Marvin’s Answer:
Hi Mark,
An FHA 203k loan can be acquired through a Bank, Mortgage Banker or Mortgage Broker.
The proximity of the lender shouldn’t matter just make sure they have some experience in handling FHA 203k loans.
If you need a referral in your state feel free to contact me as we plan to expand and help homebuyers and homeowners throughout the U.S.
Thank you and good luck.
Marvin Hernandez
How long do I have to live in my 203K financed home before I can sell or rent the property without penalties?
Joe Asked:
How long do I have to live in my 203K financed home before I can sell or rent the property without penalties?
Marvin’s Answer:
Hello Joe,
FHA & Conventional owner occupied loans usually require the property to stay owner occupied for at least 1yr./12 months.
As far as selling there is no time frame as to when you can sell.
As far as penalties there is none on FHA loans as well as most owner occupied conventional loans these days.
Hope this helped,
Marvin
Hey Marvin, just read over all of your replies and it’s great information. Had a quick question. We’re looking to buy a house that may or may not go FHA under the FHA program. If it doesn’t fly FHA, would we be able to move to a FHA 203k (streamlined or normal) with the current FHA appraisal or does it depend on the lender? For example, does the process have to start as an FHA 203k or can it be converted? Thanks in advance.
Tony asked:
Hey Marvin, just read over all of your replies and it’s great information. Had a quick question. We’re looking to buy a house that may or may not go FHA under the FHA program. If it doesn’t fly FHA, would we be able to move to a FHA 203k (streamlined or normal) with the current FHA appraisal or does it depend on the lender? For example, does the process have to start as an FHA 203k or can it be converted? Thanks in advance.
Marvin’s Answer:
Hi Tony,
In the past (when direct communication with the appraiser was allowed) I’ve offered buyers the option to switch the loan over from a
203B to a 203K for the very reason you mentioned…the property wasn’t a “go” as it didn’t fall into the standard FHA guidelines. But it depends on the Lender on whether they can switch the loan over to an FHA 203K assuming your current lender does 203K Loans.
Typically, most FHA lenders do the “Standard” FHA Loan and not 203K’s, so it helps to start the Loan Process with an FHA Lender who also works with 203K Loans in the event it does need to be switched over. Otherwise you’ll have to start a new loan process with another Lender who specializes in the 203K.
If your current lender does 203K’s Loans then it shouldn’t be difficult to switch the loan over from a regular FHA 203B to 203K but there may be a hold up with the appraisal as the appraisal will need to be modified or redone to reflect the rehab/repair work to be done.
I hope this helped, good luck.
We currently have a 203k loan, and we’re so far behind our renovation schedule. We’ve filed for three time extensions so far, and I’m almost certain we are going to be denied this last one we submitted. If we are denied, we will be stuck with a shell of a house, and a mortgage payment. All of our money is already tied up in the house, with sub contractors, and materials we purchased…
Is it possible to get another 203k loan with a different bank to finish the work? Is there a better route?
Hi!
I have a home with a current FHA loan. I am interested in and FHA203k refinance so I can add solar panels. I have a bid for 29K. Is an FHA203k Streamline OK for this type of project? My current lan balance is 232k and the current value of my house is 266k (according to zillow and comparables)Is there another type of loan that would be better?
Jeney W. Asked:
We currently have a 203k loan, and we’re so far behind our renovation schedule. We’ve filed for three time extensions so far, and I’m almost certain we are going to be denied this last one we submitted. If we are denied, we will be stuck with a shell of a house, and a mortgage payment. All of our money is already tied up in the house, with sub contractors, and materials we purchased…
Is it possible to get another 203k loan with a different bank to finish the work? Is there a better route?
Marvin’s Answer:
Hi Jeney,
Getting behind on renovations is not unusual which can be for various reasons.
The answer to your question is that your current rehab must be completed before you can consider refinancing into another FHA 203k or FHA 203b loan. The only other route would be hard money sources but you must have plenty of equity to go that route. If not, then just keep communicating with your lender and FHA cost consultant, if you have one, as that is probably the only alternative to keep the project moving forward.
Good luck.
Marvin
Kim Asked:
Hi! I have a home with a current FHA loan. I am interested in and FHA203k refinance so I can add solar panels. I have a bid for 29K. Is an FHA203k Streamline OK for this type of project? My current lan balance is 232k and the current value of my house is 266k (according to zillow and comparables)Is there another type of loan that would be better?
Marvin’s Answer:
Hi Kim,
Yes, the FHA 203k streamline would work well for your solar panel project. Keep in mind, an estimated value from Zillow, like any online valuation, is not the most accurate but it’s a start. The good news is that the 203k loan can work with very little current equity. It will probably be your best option although there are conventional alternatives available as well so feel to contact us to discuss your choices.
Thanks
Marvin