Home Buying in Ormewood Park>Question Details

Sdaniels1022…, Home Buyer in Atlanta, GA

Do you have to put down 3.5% when using a 203k and streamlined k loan if improvements are 35,500?

Asked by Sdaniels102279, Atlanta, GA Wed Nov 14, 2012

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If purchasing a HUD REO property, then the minimum down payment would be $100 as long as the credit score is 640+.
0 votes Thank Flag Link Sun Dec 9, 2012
The maximum amount that you can borrow on a 203 (k) streamline is $35,000. Yes, you must pay 3.5% down payment. If you are a first time home buyer or if you have not owned a home within the last 3 years, there are down payment assistance programs available in Georgia that will provide up to $7,500 in down payment assistance. If anyone has any questions regarding loan programs, I am here to help! Feel free to contact me via email or cell phone! I service the entire state of Georgia with mortgage financing!

Morgan Campbell, Mortgage Banker
Envoy Mortgage, Ltd.
Direct Line: 229-563-5903
E-mail: mcampbell@envoymortgage.com
0 votes Thank Flag Link Thu Nov 15, 2012
I appreciate people giving advice on this site, but people should also be very careful about the advice they give especially if it's not their field of concentration. In other words, if you ask a question about financing, read what the Loan Officer stated. If it's a question about Real Estate, read what the Realtor states.
I say this to protect our Realtor's whom we love and adore, from stating erroneous information that may land egg on their face.
As Rodney mentioned, you don't have to pay 3.5% down. He didn't say how much you can put down because it's a complicated loan. He would have to blog the answer because there are a lot of issues that can make your $100 down program, require 5% instead (has to do with over bidding). Aside from that, generically speaking, the minimum down payment on an FHA foreclosure property and going FHA, is $100 (must qualify).
You can also finance an additional $8000 for energy efficient products in the home (insulation, windows, roof, weather stripping, water heater, toilets etc).
The 35k is actually one of 2 results. The repair is the lower of 35k or 110% of the after repair value (ARV).
House costs 50k. ARV is 80k. 110% of 80k is 8k. 88k minus 50k is 38k. Therefore, you get 35k (lesser of the two).
0 votes Thank Flag Link Thu Nov 15, 2012
Minimum investment on a FHA is 3.5%. Limit for streamline is $35,000. Great product for renovation transactions.
0 votes Thank Flag Link Thu Nov 15, 2012
I believe all FHA loans (of which the 203K is one) require a minimum of 3.5% down; however, you need to talk to a qualifed lender. I can recommend John Semon with Wells Fargo, who's done several 203K loans for my clients, https://www.wfhm.com/loans/john-semon/index.page Wells Fargo has a great 203K loan program, but so does SunTrust and other banks.
Hopefully you have a good agent who can help guide you!
0 votes Thank Flag Link Wed Nov 14, 2012
I did not have a great experience. I was pre approved in August and was that I could do a 203k with a strealine k. I was told by Bank of Nashville in Smyrna, TN that I would only have to put down the $100 HUD requirement. But fast foward to 117 days and 4 extensions later and Monday I was told if I wanted to close I had to put down 3.5%. Needless to say I was in shock that all this time had past and no one had informed me of the requirement. I walked away and now I am trying to recoup all the money I had put into the home. They have agreed to repay me everything but the money I spent on home, A/C, and septic inspection. Any suggestions.
Flag Wed Nov 14, 2012
All FHA mortgages, except HUD REO's, require a 3.5% minimum down payment. HUD does not allow repairs to exceed $35,000 under their Streamline 203K program. Only the Consultant 203K allows repairs exceeding $35,000.

As one of the largest direct lenders in the country, Prospect Mortgage offers one of the largest selections of loan programs available. In addition to the standard conventional, FHA, VA, USDA, and Jumbo, we also offer a wide range on Renovation loan programs. Our Renovation programs include FHA 203K (Streamline & Consultant versions), HomePath Renovation, and HomeStyle Renovation.

For the FHA 203K program, some lenders only offer the Streamline FHA 203K. That does not give you any options should you encounter the need for the Consultant version for structural repairs or if you are looking for renovations in excess of the Streamline’s $35,000 limitation. Working with a direct lender who offers bother the Streamline and Consultant versions is very important.

For HUD’s Fiscal Year ending 09/30/12, Prospect Mortgage was the 2nd largest volume FHA 203K lender in both the country and the Metro Atlanta market. At Prospect Mortgage, we have a dedicated operations center that only handles our renovation mortgages.

Selecting a loan officer that knows the program inside and out is the key. If your loan officer is not experienced in closing a lot of these types of mortgages, then it will be a very challenging experience for you. Allow an average of 45-60 days for your 203K closing. Prepared buyers are often able to close sooner than that. Some have closed in under 30 days when they are very prepared.

All renovation work will need to be completed by a licensed and insured contractor. I have heard that some lenders may require the use of certain contractors. At Prospect Mortgage, you are free to use any contractor that you wish that meets the minimum requirements as we do not maintain any type of approved contractor list or provide contractor recommendations.

Other than for appliances in certain situations, you may not use any of the big box retailers (i.e. Best Buy, Home Depot, Lowe’s, etc). This is because they will not sign any of the HUD required 203K contractor forms.

Use of a HUD Consultant is required on the Consultant FHA 203K and highly suggested on the Streamline version.

Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing
0 votes Thank Flag Link Wed Nov 14, 2012
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