Do you have a FHA 203k question you’d like to ask our 203K Specialists? Just post it here on the blog.
Scroll down all the way to the bottom of this page (the QA post page) and type your question in the “Leave a Reply” box and press “Submit”
To leave a Facebook comment or question, just enter it in the “Facebook Add a Comment…” box directly under this post. Either way your question will be answered by a 203K Specialist.
Your question does not have to be FHA 203K related, it can be general FHA or Conventional questions as well. One of our 203K Specialists will answer your question the best to their ability.
We look forward to hearing from you!
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www.203kMortgageLender.com
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Related posts:
Cristy Asked:
I am trying to find out about the limits on the 203K loan in Idaho. I want to buy a house for $95000 and then put between $40000 and $60000 into it. The total purchase price will still be below market value. Am I over the cap for this loan?
203k Mortgage Lender’s Answer:
Hi Cristy
FHA loan limits with or without funds for renovations are the same and are easy to find if you go to this blog post: FHA Loan Limits There you will find two ways to find out the maximum loan amount for the property you are interested in.
Best of luck
Michiel Asked:
Hi,
I am trying to get some clarification on two questions related to an standard FHA 203K loan.
1) Does the loan close before all building permits are in for the project? Or does the selected contractor have to get all permits in place before the loan can close?
2) If the loan does not close before all building permits are in, who then pays for them. Does the buyer (me pay for them)? Since what if the contractor pays for them, but then for whatever reason the deal does still fall thru?
Regards
203k Mortgage Lender’s Answer:
Hi Michiel,
Typically, the permits are purchased after closing but the lender will want the Contractor to get confirmation that a permit can be issued for the planned project. As to who pays for them: Many times the Contractor will have included the cost of the permits in his bid but ultimately the responsibility would fall to the Home Owner. Also, if the loan will be closing using the 203K Standard, rather than the Streamline, the cost of permits is financeable into to the loan
Good luck on your project
I am trying to find out about the limits on the 203K loan in Idaho. I want to buy a house for $95000 and then put between $40000 and $60000 into it. The total purchase price will still be below market value. Am I over the cap for this loan?
Hi,
I am trying to get some clarification on two questions related to an standard FHA 203K loan.
1) Does the loand close before all building permits are in for the project? Or does the selected contractor have to get all permits in place before the loan can close?
2) If the loan does not close before all building permits are in, who then pays for them. Does the buyer (me pay for them)? Since what if the contractor pays for them, but then for whatever reason the deal does still fall thru?
Regards
203k situation Asked:
I have a friend whose lender defaulted on paying out the renovation portion of her FHA 203k loan. Yes, this lender is going out of business and has been banned from doing FHA business over the past few weeks. We are trying to find answers. It appears that she is still liable for paying her loan even though noone has reduced the principle in recognition of the fact that the renovation portion was never paid out by the lender. I assume there’s some justice in the world and the FHA or Fannie Mae (who bought the loan) can somehow reduce the principle? It doesn’t seem fair that my friend appears to be “on” for the higher amount even though it was never paid out.
203k Mortgage Lender’s Answer:
Hey there 203k situation,
If it hasn’t happened yet your friend’s loan should end up being transferred for servicing to another source and that is who they will need to take up the matter with. The same terms and conditions would apply so eventually the funds in the escrow account should be released one way or another…to improvements or to principle.
Hopefully the situation will get cleared up soon, for your friend’s sake…sooner rather than later.
In the mean time keep good records and get in contact with one of the FHA Homeownership Centers
Best of luck to your Friend.
Rich Asked:
Can you secure a 203K mortgage on a single family home that is not in foreclosure?
For example; we are renting a property that we would like to purchase and make improvements to both bathrooms and upgrade the furnace, would this be eligible for a 203K?
203k Mortgage Lender’s Answer:
Hi Rich,
The answer is “Yes” absolutely!!! The 203k loan can be used to purchase a property regardless of what type of sale it is…”standard”, “for sale by owner” or “distress”. Plus it can be used for refinancing a property as well.
Best to you in becoming a future homeowner
I have a friend whose lender defaulted on paying out the renovation portion of her FHA 203k loan. Yes, this lender is going out of business and has been banned from doing FHA business over the past few weeks. We are trying to find answers. It appears that she is still liable for paying her loan even though noone has reduced the principle in recognition of the fact that the renovation portion was never paid out by the lender. I assume there’s some justice in the world and the FHA or Fannie Mae (who bought the loan) can somehow reduce the principle? It doesn’t seem fair that my friend appears to be “on” for the higher amount even though it was never paid out.
Can you secure a 203K mortgage on a single family home that is not in foreclosure?
For example; we are renting a property that we would like to purchase and make improvements to both bathrooms and upgrade the furnace, would this be eligible for a 203K?
Thanks
Rich
Nicole Asked:
My husband has been approved for an FHA loan and we found a home that we would like to use the FHA203 on instead. With the new regulations and guidelines in place, will the lender have to take my credit into consideration even if I am not on the loan? His first FHA loan did not include me.
203k Mortgage Lender’s Answer:
Hi Nicole,
On FHA loans when a spouse is not going to be on the loan the non-qualifying spouse’s credit is not taken into consideration but any additional debts you have will be added onto your spouse who is qualifying when the home is in a community property state.
Good luck.
My husband has been approved for an FHA loan and we found a home that we would like to use the FHA203 on instead. With the new regulations and guidelines in place, will the lender have to take my credit into consideration even if I am not on the loan? His first FHA loan did not include me.
Tracy Asked:
If I have a FHA Title One loan that was used to say finish our basement. And six months later we want to do a 203k refinance for an addition. Will the principal on the FHA Title One loan be included in the 203k refinance? I understand FHA Title One are not against the property’s value so no equity is required, are considered a lien (sit in second position) and can be used in combination with a 203k. My concern is if after renovation the appraised value has to be more than the total of both the 203k refinance AND the Title One, the property may not have enough equity to cover both. Has anyone had any experience working with someone who was usin both a Title One and 203k to make improvements on a home? Thanks for any advice; I know this is a tough one. Even the FHA hotline wasn’t much help!
203k Mortgage Lender’s Answer:
Hi Tracy,
FHA title one loans (which are home improvement seconds) are rare to come across these days plus trying to combine one with an FHA 203k loan would be redundant.
A 203k refinance would pay off your primary home loan along with any junior liens and include the funds for improvements. If there is not enough equity to accomplish that then you would need to bring in the funds for the shortage at closing.
Being able to find a Title one source and secondly being able to combine both the 203k & Title one is very doubtful if even allowed but if there is any possibility of accomplishing that your best bet would be getting the 203k loan done first by itself.
Best of luck
If I have a FHA Title One loan that was used to say finish our basement. And six months later we want to do a 203k refinance for an addition. Will the principal on the FHA Title One loan be included in the 203k refinance? I understand FHA Title One are not against the property’s value so no equity is required, are considered a lien (sit in second position) and can be used in combination with a 203k. My concern is if after renovation the appraised value has to be more than the total of both the 203k refinance AND the Title One, the property may not have enough equity to cover both. Has anyone had any experience working with someone who was usin both a Title One and 203k to make improvements on a home? Thanks for any advice; I know this is a tough one. Even the FHA hotline wasn’t much help!
Anne Asked:
Hello,
I bought a 2 unit owner/occupied home in 2007, have been paying a higher interest rate because it has rental income. The problem is I tried to refinance last fall and found out that the home still has open permits for the basement apartment and so I was refused the loan. I was told that it is not a legal apartment.
I have checked with the City to find out if I could get a certificate of occupancy with the work that has been done and told it does not meet code.
Now it will cost me thousands of dollars to bring it to code. Is the 203K loan an option for me? The home was appraised at 215000.00 and I owe 132,159.00 on it currently. Thank you
203k Mortgage Lender’s Answer:
Hi Anne,
The answer is “Yes” the 203k loan is an option for you to bring your property up to code. Plus, you mentioned you were paying a higher rate because it has rental income but yet its owner occupied so maybe now you will get a lower rate than what you have currently while at the same time making the second unit / apartment legal.
Best to you
Hayley Asked:
How long does the Quality control take before the closing of a 203k loan?
203k Mortgage Lender’s Answer:
Hi Hayley,
There is quality control that can take place at different intervals for any type of home loan but because the 203k can have various other types of parties involved (contractors, architects, engineers etc.) there would be more QC involved.
So, between the quality control related only to the loan process itself, the rehab portion or before funds are wired to close plus each lender having their own procedures the time needed will vary.
Your best bet would be to talk to the lender who is actually doing your loan to get a more accurate answer on the QC time you are referring to.
Best regards
Hello,
I bought a 2 unit owner/occupied home in 2007, have been paying a higher interest rate because it has rental income. The problem is I tried to refinance last fall and found out that the home still has open permits for the basement apartment and so I was refused the loan. I was told that it is not a legal apartment.
I have checked with the City to find out if I could get a certificate of occupancy with the work that has been done and told it does not meet code.
Now it will cost me thousands of dollars to bring it to code. Is the 203K loan an option for me? The home was appraised at 215000.00 and I owe 132,159.00 on it currently. Thank you
Johanna Asked:
I have a contract on foreclosed home and have secured a 203k with a lender. How long do I have to hold onto the 203k before I can refinance to a conventional loan?
203k Mortgage Lender’s Answer:
Hi Johanna,
Actually, you can refinance out of an FHA loan at anytime as long as a conventional appraisal would support it. If the work that is being done or to be done will not hinder you from moving into a conventional loan, then you could even refinance before the 203K is completed. Preferably though after all is said and done would be ideal.
As a reminder though a 203k loan is a first mortgage, all in one loan, fully amortized that come with fixed rates comparable to other first mortgages without any improvement funds but for whatever reason and at any time it can be paid off with no penalties.
Good luck on your foreclosed home purchase
Flint Asked:
I made an offer on a short sale from wells fargo and we drew up the contract with a 203k attachment for 20k. They will accept our offer as long as we take the 203k out. Why would a bank do this? The house is 60k below appraisal, but the home does need carpet and paint. The bank will get its money regardless for the home and the 20k is put in escrow by the lender correct? I dont understand why wells fargo is making this more difficult than it has to be.
203k Mortgage Lender’s Answer:
Hi Flint,
You are correct the seller in this case the bank will get their money regardless of the dollar amount of improvements you are financing into your 203k loan and yes that amount is held in an escrow account set up by the new lender handling your 203k loan. It’s no different than writing up a contract with a standard FHA loan without any improvement funds, the seller ends up with the same net amount so there just might be other reasons for the seller not accepting the 203k financing.
It can be frustrating dealing with banks as sellers but if you can find out what the reasoning is then at least you can address whatever their concerns are. The other suggestion you can consider is doing a 203k refinance after closing; if so then try to keep the cost down on the purchase loan.
Hope it all works out for you.
How long does the Quality control take before the closing of a 203k loan?
I have a contract on foreclosed home and have secured a 203k with a lender. How long do I have to hold onto the 203k before I can refinance to a conventional loan?
I made an offer on a short sale from wells fargo and we drew up the contract with a 203k attachment for 20k. They will accept our offer as long as we take the 203k out. Why would a bank do this? The house is 60k below appraisal, but the home does need carpet and paint. The bank will get its money regardless for the home and the 20k is put in escrow by the lender correct? I dont understand why wells fargo is making this more difficult than it has to be.
Theodore Asked:
I have been rehabing a home myself for the last year and the owner has now offered to sell it to me but there are still some repairs that need to be done. I have a 701 FICO Transunion, 692 FICO Equifax and a 544? PLUS Experian. My challenges are that I do not have any revolving accounts, only a car note, with only two lates back in Aug and Sep 2010. I do not have any rental history since 2001 as I moved back home to get on my feet. I have been with my current employer for 1 year and 8 months, but with my previous employer for 7 years. She is selling for 40K, there are about 30K in repairs still needed and the drive by appraisal value is 129,100. I don’t want to have my credit pulled if it is likely that I won’t qualify. So, my question is do you think that I will qualify given the above? I do have 6k available as a down payment and I live in rural NC.
203k Mortgage Lender’s Answer:
Hi Theodore,
Although it might be a challenge due to lack of positive credit lines plus not having 2 years of completed employment it could still be possible to currently qualify considering you do have an acceptable middle credit score. Your best bet would be to contact a 203k specialist for North Carolina who can do both automated approvals which can override a lot of your concerns but can also do a manual underwrite with non-traditional credit references in case the first option is not doable. Either way they would need to pull your credit report.
If you want to increase your odds then you could wait until you have the full two years of employment while at the same time open up some new credit accounts to get some more payment history under your belt. No guarantees but eventually you will need to take the plunge to find out one way or another or at least have a plan if you’re going to purchase.
Good luck
Sheila B. Asked:
Hi,
We found a couple of houses that we like and are likely candidates for 203k loan. However, we would like to do major renovations such as adding second floor and expanding the main level by adding additional rooms and/or space which may require to tear down some walls of the house. Are those renovations allowed in the 203k loan?
Thanks.
203k Mortgage Lender’s Answer:
Hi Sheila,
Absolutely!!! Major renovations like the one’s you mentioned- adding a second floor, expanding the main level, adding additional rooms and tearing down walls, are all allowed with the full version of the 203k loan.
Sounds like a big project, hope it turns out great.
Good luck.
Hi,
We found a couple of houses that we like and are likely candidates for 203k loan. However, we would like to do major renovations such as adding second floor and expanding the main level by adding additional rooms and/or space which may require to tear down some walls of the house. Are those renovations allowed in the 203k loan?
Thanks.
I have been rehabing a home myself for the last year and the owner has now offered to sell it to me but there are still some repairs that need to be done. I have a 701 FICO Transunion, 692 FICO Equifax and a 544? PLUS Experian. My challenges are that I do not have any revolving accounts, only a car note, with only two lates back in Aug and Sep 2010. I do not have any rental history since 2001 as I moved back home to get on my feet. I have been with my current employer for 1 year and 8 months, but with my previous employer for 7 years. She is selling for 40K, there are about 30K in repairs still needed and the drive by appraisal value is 129,100. I don’t want to have my credit pulled if it is likely that I won’t qualify. So, my question is do you think that I will qualify given the above? I do have 6k available as a down payment and I live in rural NC.
Mica Asked:
Hello. I just found a wonderful HUD home in a great neighborhood. I was able to secure financing for the property. HUD set aside funds in escrow to make some repairs, however; the amount of repairs exceeds the available funds. When I asked my loan officer about 203k financing he said that although my credit score is high enough for purchasing through FHA, it is not high enough for the 203K financing. Is this true, and is there more stingent credit requirements for the 203k loans?
203k Mortgage Lender’s Answer:
Hi Mica,
Good to hear you found the home you wanted in this case a HUD home. Credit scores can be a hurdle for many homebuyers these days and although FHA loans allow for lower credit scores FHA lenders can have their own minimum requirements when it comes to credit.
For the most part the FHA 203k loan with renovations in comparison to an FHA loan without do tend to have higher minimum credit score requirements but each lender can have lower thresholds so a second or third opinion couldn’t hurt.
Hope it all works out for you, best of luck.
Jaime Asked:
I want to buy a home from an investor who just purchased it from a short sale. How long do I have to wait before I can buy it from him with an FHA 203 streamline loan? Can I turn around and buy it from in with in the first 30 days or is there a time restraint for him to resell??
203k Mortgage Lender’s Answer:
Hi Jaime,
The answer is “Yes” there is a minimum time restraint when using FHA financing on a property which was recently purchased and now being resold again. It is called the FHA 90 day anti flipping rule but currently there is a waiver in effect until the end of 2012 that cuts down on that waiting period. Below are some of those conditions to the FHA 90 day Anti-flipping regulation waiver.
And then in the case where the property is being sold for more than 20% over the previous sale, the following guidelines must be adhered to:
Now before writing up any contracts on properties being resold in a short period of time the recommendation would be to contact your FHA 203k Loan Specialist first because each lender might have other stipulations or overlays regarding this matter.
Here are sources and links for more information:
FHA Anti-Flipping Waiver Press Release
FHA Anti-Flipping Waiver PDF document
Best of luck on your purchase.
Hello. I just found a wonderful HUD home in a great neighborhood. I was able to secure financing for the property. HUD set aside funds in escrow to make some repairs, however; the amount of repairs exceeds the available funds. When I asked my loan officer about 203k financing he said that although my credit score is high enough for purchasing through FHA, it is not high enough for the 203K financing. Is this true, and is there more stingent credit requirements for the 203k loans?
I want to buy a home from an investor who just purchased it from a short sale. How long do I have to wait before I can buy it from him with an FHA 203 streamline loan? Can I turn around and buy it from in with in the first 30 days or is there a time restraint for him to resell??
Thanks
Jamie
Denita Asked:
when you defer your payment on a 203k loan, I know this is finance in your loan amount. Is the payment taken out of your escrow repair account?
203k Mortgage Lender’s Answer:
Hi Denita,
Yes, the up to 6 months of payments that are allowed to be financed on a standard 203k loan are taken out of the escrow repair amount.
Although, it is a decision made by the 203k consultant and is typically made only when the property is or will be not habitable.
Best of luck
when you defer your payment on a 203k loan, I know this is finance in your loan amount. Is the payment taken out of your escrow repair account?
Marc Asked:
My contractor is trying to get certification by Wells Fargo.
Wells Fargo isists that he needs a business provledge liscense and a contractors liscense form the city. On the Philadelphia website it clearly states that Corporations are exempt from a business privledge liscense. My contractoe is liscensed to do work in the State of PA
203k Mortgage Lender’s Answer:
Hi Marc,
The recommendation for you would be to print out the information from the PA website you are referring to and turn it into the HMC (Home Mortgage Consultant) from Wells. The HMC can then take the printout and submit it to the Wells Fargo Contractor Validation Department.
The HMC could also send an email to the city asking if a corporation is required to apply for a business privilege license and city registration is necessary for all contractors. The information from the city’s reply can then be used.
Here is the e-mail “license.issuance@phila.gov” for the department in Philadelphia which was shared with this site but not verified. If you feel progress is still not being made with your current lending source then contact the 203k Loan Specialist for Pennsylvania which could be an alternative source for you if needed.
Best of luck
Mitch Asked:
Hi,
I have a question about a 203K loan. My girlfriend and I have looked at many houses and we already know that we are doing a 203K loan for the purchase to update/change things as needed in the house. My question is, do we have to come up with the overage money if we offer more than the list price on a home? For instance, the list price for a home is $125,000 but we offer $140,000 just to be aggressive and make sure we get the house, do we then have to come up with the $15,000 ourselves or can that be part of the loan?
Thanks
203k Mortgage Lender’s Answer:
Hi Mitch,
It’s not uncommon to get into a bidding war and exceed the list price. Your lender should not have an issue with the agreed upon sales price if the appraiser addresses the situation properly and the value of the home will warrant the overage.
So if the value comes in on the appraisal the increased 15k could be part of the new loan if not any shortage would need to be made up or the sale price re-negotiated. That is where your Real Estate Professional should be able to assist you.
Best of luck
My contractor is trying to get certification by Wells Fargo.
Wells Fargo isists that he needs a business provledge liscense and a contractors liscense form the city. On the Philadelphia website it clearly states that Corporations are exempt from a business privledge liscense. My contractoe is liscensed to do work in the State of PA
Hartstk Asked:
Question: I currently live in a home to large for myself and want to downsize. I have found a bank owned home and want to use a 203k loan to purchase and improve the home. I have not had any luck sellin my home but have several people interested in leasing and possible lease to purchase. My mortgage lender tells me I do not qualify and that the underwriters told him it does not make sense for me to downsize from a 400,000 home to a 100,000 home. Is that true or is there a way around it!?
203k Mortgage Lender’s Answer:
You mentioned two issues that your mortgage lender told you…1) not being able to qualify and 2) the downsizing not making sense to the underwriter.
The motivation and reasoning for the downsizing is debatable but if your lender is already saying you don’t qualify then the issue of downsizing won’t even matter.
So, the first step you might want to consider is to get a second opinion about qualifying from another lender. With that said feel free to contact the 203k Loan Specialist for your State to go over your scenario.
Good luck to you.
Hi,
I have a question about a 203K loan. My girlfriend and I have looked at many houses and we already know that we are doing a 203K loan for the purchase to update/change things as needed in the house. My question is, do we have to come up with the overage money if we offer more than the list price on a home? For instance, the list price for a home is $125,000 but we offer $140,000 just to be aggressive and make sure we get the house, do we then have to come up with the $15,000 ourselves or can that be part of the loan?
Thanks
Question: I currently live in a home to large for myself and want to downsize. I have found a bank owned home and want to use a 203k loan to purchase and improve the home. I have not had any luck sellin my home but have several people interested in leasing and possible lease to purchase. My mortgage lender tells me I do not qualify and that the underwriters told him it does not make sense for me to downsize from a 400,000 home to a 100,000 home. Is that true or is there a way around it!?
Tara Asked:
Hi:
We are considering purchasing a home using regular FHA financing and then renovating it in 3 or so years by refinancing into a 203K FHA loan. The reason for waiting is because (a) we want to live in the place long enough to know exactly what we want to do with the place and (b) in three years, we will be eligible for a significantly higher loan amount and therefore will be able to get enough funding to do the extensive renovations I would like to do.
Are there any disadvantages to waiting to do the 203K later other than the possibility of higher interest rates? Will we have to pay another down payment of 3.5%?
Thank you
203k Mortgage Lender’s Answer:
Hi Tara,
Your plan to refinance your future property into a 203k loan once you live in it long enough to know exactly what you want to do to it sounds like a reasonable plan. A few things to consider though…
Does the property meet your minimum needs at this time and can you “live with it” in it’s present state? If not, you can certainly use a 203K to purchase the home and do some of the important upgrades now. Later and when finances will allow, you can look at doing another 203K for the remainder of the work.
You will “Not” have to pay another down payment of 3.5% when you do a 203K refinance. Typically no additional cash is needed to bring in for closing unless your equity position is very low. The calculations for a refinance differ from that for a purchase and your 203K mortgage lender can help you with those calculations.
Best to you on your 203k whether now or later
Hi:
We are considering purchasing a home using regular FHA financing and then renovating it in 3 or so years by refinancing into a 203K FHA loan. The reason for waiting is because (a) we want to live in the place long enough to know exactly what we want to do with the place and (b) in three years, we will be eligible for a significantly higher loan amount and therefore will be able to get enough funding to do the extensive renovations I would like to do.
Are there any disadvantages to waiting to do the 203K later other than the possibility of higher interest rates? Will we have to pay another down payment of 3.5%?
Thank you
Tatiana Asked:
My husband and I are thinking about doing the FHA 203k. There are some repairs we’d like to do ourselves and some that we’d like a contractor to take care of. We want to take out a wall separating the kitchen, dining room and living room to open the space up. We can pay for the materials cash and do it ourselves, but is it going to be an issue if we need to do this before the hardwood floors that would be paid for from the 203k would be done? Thanks in advance.
203k Mortgage Lender’s Answer:
Hi Tatiana,
Whatever projects you decide to pay for yourself and do on your own is fine. Your question is more related to what order the work should get done which really should be directed to the contractor who will be handling the work approved for your 203k portion. For any work though that will be covered by the 203k you should avoid any possible conflicts or delay in getting it done.
Hope that helps have fun taking out walls!
Griffin Asked:
I am a licensed contractor wanting to buy a 203k home to live in. Will I be allowed to be reimbursed for my labor and subcontractors who I am paying out for work? I see that homeowners are not allowed to be paid for labor. Not sure how this applies to subs.
203k Mortgage Lender’s Answer:
Hi Griffin,
Although you are a licensed contractor the answer to your question is “No” you cannot be paid for your own labor for work on your own home with the 203k loan. If the work is done by sub-contractors and you can provide proper evidence (invoice, copy of check, paid receipt, etc), then you can be reimbursed for those expenditures. But typically, those licensed to do work on the property should be part of the original bids that were approved so that they can be paid directly.
For any of you self-helpers (DIY – Do it yourselfers), licensed or unlicensed, when allowed by the lender the bid must itemize materials & labor plus be supported by an “arms-length” (non-related person) bid from another qualified contractor. Then those funds escrowed for the Self-Helpers labor will be applied to the principal loan balance, if not needed for other cash expenditures or used for additional work on the home.
As you move forward, be cautious because many lenders are no longer allowing the home buyer or homeowner to complete their own work, even if they’re qualified to do so.
Best to you.
Tim Asked:
We are interested in using the 203k loan to purchase a home. We are in a current mortgage at our current home that is a regular FHA loan and we would like to purchase the new home with a 203k before we sell our current home. Is that allowed?
203k Mortgage Lender’s Answer:
Hi Tim,
Normally, FHA will not permit a borrower to have more than one FHA insured mortgage at a time. Although, there are a few exceptions when you are permitted to have a second FHA loan such as being transferred by your employer or an increase in family size as a couple of examples. There are other instances that can apply as well so ask your 203k Loan Specialist to go over them with you.
If in your case none of the exceptions apply, another potential option you could consider would be to refinance your existing home into a conventional mortgage, then apply for the FHA loan on the new home. Certain guidelines would apply as well to get that accomplished but this might be an option for you.
Good luck on your purchase.
My husband and I are thinking about doing the FHA 203k. There are some repairs we’d like to do ourselves and some that we’d like a contractor to take care of. We want to take out a wall separating the kitchen, dining room and living room to open the space up. We can pay for the materials cash and do it ourselves, but is it going to be an issue if we need to do this before the hardwood floors that would be paid for from the 203k would be done? Thanks in advance.
I am a licensed contractor wanting to buy a 203k home to live in. Will I be allowed to be reimbursed for my labor and subcontractors who I am paying out for work? I see that homeowners are not allowed to be paid for labor. Not sure how this applies to subs.
We are interested in using the 203k loan to purchase a home. We are in a current mortgage at our current home that is a regular FHA loan and we would like to purchase the new home with a 203k before we sell our current home. Is that allowed?
Lola Asked:
What happens if one does not meet the 203k deadline on repairs? We are already 2 months behind of the original schedule and will likely need another 6 – 8 weeks to complete.
The scenario is as follows:
Problems were much more extensive than originally noted with inspection.
Work has been ongoing and steady, but due to extensive list is taking longer.
The mortgage has been paid on time (so no default).
A request of extension was requested, but the bank never replied. We just keep working on it and are about to request our 4th (of 5) draw.
What is the worst thing that can happen at this point?
203K Mortgage Lender’s Answer:
Hi Lola,
Fortunately, it sounds like work is progressing and getting an extension should not be a problem. If you’re not receiving a response to your extension request, it may be because FHA allows a total of 6 months to complete the project and some lenders don’t address the deadline until after the full 6 months has elapsed.
You indicated you were about to request your 4th draw which means you’ll have only one draw remaining. That 5th and final draw can only be requested after everything is completed and the home is ready for final inspection. That being said, be sure the work has progressed far enough that the last two draws will cover everything. If you have any concerns, reach out to your HUD Consultant.
Now, if it gets to a point you’re unable to communicate directly with your lender, you can reach out to FHA through their Home Ownership Center.
Best of Luck to you.
What happens if one does not meet the 203k deadline on repairs? We are already 2 months behind of the original schedule and will likely need another 6 – 8 weeks to complete.
The scenario is as follows:
Problems were much more extensive than originally noted with inspection.
Work has been ongoing and steady, but due to extensive list is taking longer.
The mortgage has been paid on time (so no default).
A request of extension was requested, but the bank never replied. We just keep working on it and are about to request our 4th (of 5) draw.
What is the worst thing that can happen at this point?
Leslie Asked:
Are the regulations regarding eligibility for FHA financing changing this month (January 2012). And, if so, is there anywhere I can go to see what those changes are? We sold our prior home on a financial hardship shortsale but have found a smaller and more affordable home we wish to buy.
203K Mortgage Lender’s Answer:
Hello Leslie,
Guidelines related to foreclosures and short sales are still 3 years from when it happened to be able to get an FHA loan. That time can go by fast so in the meantime keep everything else active and current or open up some new accounts. This way you can show positive history trade lines after your short sale. Plus, it should help increase your credit scores which you will need after that time period is over.
Best of luck
Are the regulations regarding eligibility for FHA financing changing this month (January 2012). And, if so, is there anywhere I can go to see what those changes are? We sold our prior home on a financial hardship shortsale but have found a smaller and more affordable home we wish to buy.