203k loans are a fantastic alternative to traditional FHA loans or conventional loans especially when buyers are looking to purchase any 1-4 unit property that needs work. They work great for REOs and "as-is" properties where the sellers can't or won't pay for repairs.
FHA and 203k have the same basic guidelines in order to qualify but 203k loans really open up a world of opportunity for buyers that would otherwise be shut out of a property because the condition.
feel free to contact me if you'd like more info
We hold regular workshops on how to put these types of loans together. Mike Young (HUD Consultant) and a specialist in this product will ensure a successful transaction. I have helped numerous buyers utilize these loans to purchase "diamonds in the rough".
Renovation Specialist, Wells Fargo
It's me again. Don't get discouraged. It is really possible. You can also try Bill Smalley at 800- 435-1756 (Prospect Mortgage). He has an office Colusa and Solano. You can also email him at Bill.Smalley@prospectmtg.com.
It does take a bit more work and time, so be prepared. Best of luck to you in your home search.
Keller Williams Bay Area
If you have questions and want to meet with someone local, I am in Alameda and my team has 47 years experience between three people. We can help you with your 203K. It's a great program. I wish it was more "acceptable" in this day and age.
I have a mortgage broker who specializes in 203K Loan in Wellsfargo, but check with Jim first since he is also with Wells. .
Frank Howard Allen Realtors
I am smack dab in the middle of a purchase where a 203K loan is involved. From the buyers perspective, I will tell you that Todd is 110% right. These loans involve additional paperwork from an appraiser that is dependent on paperwork from a 203K consultant and contractor (if you are going for the full renovation loan.) Last Thursday we had to stop progress just to have a discussion on the presentation format for all of this paperwork--Which forced my very kind and generous contractor to go back and redo all his cost estimates one more time. This weekend Iâ€™m am signing, scanning and trying to force almost 10 MB of paperwork into the 2MB slot my e-mail account will accept. As well as trying to figure out what buying a house has to do with the Patriot Act---oh well, I have been duly informed.
Anyway, it is a great program if you can find a property that fits your own personal criteria and get a contract on it. For me, the man that has plans A-Z, I picked a home that was outdated but functional just incase the 203K Loan somehow falls through between now and closing. Iâ€™m still waiting for the result of the appraisal which will set my budget for the project or not.
I have a "good news, bad news" answer for you. The good news first.....
I have a wonderful mortgage professional who could help you with a 203k "light" rehab loan. Their model is one that makes a lot of sense in this environment; that is, an environment where lenders are generally jittery and conservative, and where appraisals have given a lot of us fits in the recent past due to necessary compliance with the Home Valuation Code of Conduct (HVCC).
In general, their model is as effective as any model can be in this environment because:
1) They loan their own money (i.e., they are a "direct lender"), they don't just broker loans of other institutions' money. Though they CAN broker loans if necessary, having their own money to lend means more authority and control over the process..... no middle man.
2) They have local underwriters. You aren't appealing to someone who may not be familiar with local practices, market characteristics, and housing inventory. They're not located right in Berkeley, but at least they're Bay Area.
3) Finally, they have a "pool" of local highly-respected appraisers who have been working extensively in this area for years. During the first days of the HVCC, an appraiser from somewhere like Manteca might be assigned to value Oakland and Berkeley properties, and we had lots of weird, frustrating and downright incorrect results. That can still happen if you have a brokered loan with an out of area lender.
Now the bad news..... your Realtor may not have been referring to difficulty in getting the 203k loan itself, but in getting an offer accepted when you need a 203k loan. These loans add moving parts, complications and possibly time to the escrow process; in other words, risk. The hard fact of the matter is, there is a market for Berkeley property, and usually more than one buyer interested. It doesn't matter if the property is a short sale, a bank-owned/REO/foreclosure listing, or a normal sale. If a seller has a choice between a buyer with conventional financing and one with 203k financing, they'll take the one most likely to close escrow without hiccups. I can see how your Realtor might have indicated that it will be extremely difficult to buy a home using 203k financing in Berkeley.
If you're in the 94610 ZIP Code (I lived at Staten & Van Buren in Adams Point before moving to Berkeley 10 years ago), then you're likely aware of neighborhoods in Oakland that offer a fabulous lifestyle, but with fewer headaches than trying to buy in Berkeley. You might find more opportunity there..... though, in truth, multiple offers are common on many Oakland properties as well.
Best to you, and good luck!
Red Oak Realty
I do 203K loans & I am happy to help you. Call me at 480-422-5095.
Is there a reason why your Realtor told you that "it would be almost impossible for you to get a 203K loan"?
All the best,
Roswell Moore, CMPS
Certified Mortgage Planner
I am a loan officer for PRMG, Inc.
We do provide FHA 203(k) Streamline Renovation Loans.
If you would like to contact me I would be happy to go over the guidelines & current rates & terms.