Robert, yes you can....

Jim has given your terrible advice here, on many levels.

Most people on an FHA loan put down 3.5% and hardly have enough equity to even begin to qualify for a 2nd mortgage or HELOC. That is why the 203k loan is so great, it factors in the improvements into the new value allowing you to qualify for more than the purchase price or current as is value.

His theory about the average rate is also way off because even if you could get a HELOC, the rates are nowhere near 10% they are much much less (think 4-6%)

Rates on 203k loans are also capped around 6% so the rate will not be substantially more than a normal FHA loan, its not allowed.

If you still need a lender we have a dedicated team in my office to process these loans specifically - shhot me an email or call, good luck.

You are most likely going to have to wait 6 months to 1 year depending on your situation. Also what type of home improvements? There are only certain improvements that can be addressed with the 203K streamlined, I can email you the list if you wish. You will need a licensed contractor to do the bid and work for you.

Does the lender you got your current loan from do the 203K loans? If not Vitek does, you can contact Cheryl Foley 530-887-3418, they are affiliated with Lyon Real Estate. Also ask about an EEM- energy loan, to help upgrade heating, windows, insulation if the house needs that too.

It's too bad you didn't do it at the time of purchase, as you will be paying your closing costs again.

Teri Andrews-Murch, Realtor®, SRES®
DRE CA Lic # 01734030
Lyon Real Estate
1900 Grass Valley Highway, Suite 100
Auburn, Ca, 95603
Direct Ph: 530-798-0215

You got the home with a regular FHA loan? Did you know that FHA203 K loans are more expensive than regular FHA loans.

What you want to do is add home improvements, not rehabilitation. A subtle difference but an important one.

The usual procedure is to apply for, and obtain a home improvement loan as a second mortgage. That way you leave your good interest rate and payment on your existing FHA loan alone. although the second mortgage rate is higher, the average rate is better for you.

Example original first FHA loan of $200,000 at 6%
new HIL second mortgage $50,000 at 10.5%
is a lower rate averaged over the the amount of $250,000 than a new 7% FHA203K of the same amount of $250,000..
Somebody with a calculator please double check me. Did that in my head.

Hello Robert,

What is a few months if it hasn't been 6 months you will have to wait. There are a lot guidelines that need to be satisfied in order for the refi. to be approved. Rule changes happen on a weekly basis so it is important to work with someone that is compliant, and up to date. Feel free to call me at your earliest convenience.

Regards,
Mike
Cobalt Financial
916-817-6833 EXT 112