Financing in Chicago>Question Details

Brandy Newso…, Home Buyer in Chicago, IL

Are banks reluctant to approve 203K loans in this market?

Asked by Brandy Newsome, Chicago, IL Sun Nov 28, 2010

Help the community by answering this question:


Hi Brandy,

We (Wintrust Mortgage) have been writing 203K Streamlines and Full 203K loans without any problems; the 203K one of our niche programs.

Please feel free to contact me directly at 773-456-9662 or if you would like more information or help getting started with the approval process.

Kind regards,
2 votes Thank Flag Link Mon Nov 29, 2010
Not really, but shop around. My web site has a 203K reference with Ardain Mortgage.
1 vote Thank Flag Link Mon Nov 29, 2010
From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
This shortens the closing time by weeks. Try for more information.
0 votes Thank Flag Link Sat May 25, 2013
Hi Brandy.

Short answer: Yes.
0 votes Thank Flag Link Tue Jan 4, 2011
Hi Brandy,

First, realize that this loan is a niche and not all lenders offer it. It is best to search out the right lender, Realtor and consultant; In fact, if you find the consultant first, will find the lender. The REO departments are opening up widely to the 203(k) as it is just about the only loan available for any property that has repair conditions. You will see significant changes to the program in 2011 and for the better. Good Luck

Michael Grace
0 votes Thank Flag Link Tue Jan 4, 2011
HI Brandy,

Sellers of REO's are becoming more open to accepting offers using an FHA 203k loan. Lenders originating loans are also becoming more open to offering the 203k. Any FHA lender is allowed to do 203k's as long as they have the back-end processes in place. Make certain that you use an experienced 203k lender, a Realtor who knows the correct verbiage to include in any 203k offer and a Certified 203k Contractor. Go to to locate these Certified 203k Contractors.

Contractor Directory for the FHA 203(k) loan
(480) 463-4663
Web Reference:
0 votes Thank Flag Link Fri Dec 10, 2010
In this market, banks are being relatively careful about approving any type of loan. As in any market, there are a good number of steps required to apply for the loan as an individual - and there are numerous factors with regard to the property one is trying to finance which must be considered and approved.
Best bet for you is to consult a real estate agent to help you figure out if you qualify, personally, and to help you work with a lender to narrow down your search to properties that will likely qualify - so that you don't waste time and effort in finding a home that will work for you.
If you would like some assistance, we have a great number of experts who have experience with 203k financing and helping prosective buyers in successfully completing such transactions. Check us out here:
Good luck to you! It's a great market to be finding a deal!
Web Reference:
0 votes Thank Flag Link Tue Nov 30, 2010

To answer your question, no. They are riskier from a lender perspective, which is why the interest rate is higher for a FHA 203k loan. But, the qualifications are generally no different for an FHA 203k mortgage than for a regular FHA mortgage. At Ardain Mortgage, we specialize in the FHA 203k rehab loans, and we help clients with both the regular FHA 203k and the streamline. It is a great loan product, and I enjoy writing them. Here's a great overview article written by the owner of my company regarding the FHA 203k loan:

Call me to get pre-approved or with any question you may have.

Bradley Eggers
Senior Loan Originator
Ardain Mortgage
847-744-0168 (cell)
847-963-1000 (office)
0 votes Thank Flag Link Tue Nov 30, 2010
No they are not. They do them. Not often, but they do them. I just closed with two buyers last month who did them and they both used different lenders for them.

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
0 votes Thank Flag Link Mon Nov 29, 2010
203K program is through FHA and only specific mortgage brokers have knowledge about these kinds of loans. They also require an experienced SFR realtor to assist you with market values in the area since you are buying the property below market value and making improvements to the property to get to market value.

The property needs to be inspected by FHA before and after and needs to be appraised in "As-Is" condition and after it is improved.
0 votes Thank Flag Link Mon Nov 29, 2010
Bnaks are wroting 203k loans, as with any loan or mortgage they look to see if teh buyer is quailified and their financials and credit are withijn their required quidelines.. For 203k you should meet with a loan officer who is expereinced with these types of loans, all are not so be sure to ask up fornt.

Please see my blog for some tips on getting a mortgage in todays market.
0 votes Thank Flag Link Mon Nov 29, 2010
Not in my area! In fact, 203K loans are quite popular right now! With so many people buying short sales and bank owned properties, they often NEED a rehab loan to take care of items where maintenance has been deferred by the prior owners. People who cannot afford their mortgage usually also cannot afford to keep up with home maintenance. A 203K loan is a fantastic way to address those issues and get a buyer into a home they can afford.
0 votes Thank Flag Link Mon Nov 29, 2010
Brandy I have not had a problem with any 203k loans recently. The buyer has to be approved the after repair amount of the loan and it is easier if you keep to a Streamline 203k, that is to do less than 35,000.00 in repairs.
0 votes Thank Flag Link Mon Nov 29, 2010
Banks are not reluctant to lend money. In fact, I have a client who is purchasing a home at this time through a lender who does 203 K. There will be additional work required and inspection especially if you are getting a FHA. Be prepared to pay for the HUD inspection which is required for FHA 203 K. For assistance, feel free to contact me at anytime.

Harold Arnold
American Invsco Realty
0 votes Thank Flag Link Mon Nov 29, 2010
Hi Brandy,

The guidelines for a 203k and Fha are almost the same. The main advantage of a fha vs conventional loan is that the credit qualifying criteria for a borrower are not as strict as conventional loan financing and the down payment or Equity requirements are less. In comparing a purchase money FHA loan against a Conforming or A paper loan, the FHA loan will generally have the least amount of money required to close and the lower payment.

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family mortgage insurance programs. These programs operate through FHA-approved lending institutions which submit applications to have the property appraised and have the buyer's credit approved. These lenders fund the mortgage loans which the Department insures. HUD does not make direct loans to help people buy homes.

Hope this helps,

0 votes Thank Flag Link Sun Nov 28, 2010
Hi Brandy,

I have worked with a few buyers recently who obtained 203K loans without many problems. Just make sure you find a lender, agent, consultant, and contractor who know the process. If you are looking for any recommendations please feel free to reach out to me.

Luke Blahnik
0 votes Thank Flag Link Sun Nov 28, 2010
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