In my 23 year career as a Mortgage Banker, I've had the pleasure to close many 203k loans. My answer to your question is twofold.
First, the lending environment for 203k loans is much tighter today than it used to be. There are far fewer Lenders offering this program, and, when they do, they may have more stringent guidelines for obtaining an approval than even the FHA Underwriting Guidelines suggest.
Second, and once you've identified a Lender for your 203k loan, the key to success with this program is the paperwork. Your Licensed Contractor must prepare accurate, legible, and professional estimates. I can't tell you how often I am presented with sloppy paperwork by the Contractors. Be sure your Contractor knows she has to be on-point an professional in her presentation of her work estimates. Your Loan Officer at the Lender needs to be VERY experienced with the program. When interviewing Loan Officers you should ask if he can complete the 203k Worksheet manually, without the aid of a computer. The basic knowledge required to do so is key to your success in working with the Loan Officer. If she doesn't know how to complete the form without the aid of the computer, move on. Intimate knowledge of THAT form, proves the experience level. And that experience is KEY in moving your loan application through the system efficiently.
There are two types of FHA 203k Loans: Regular 203k or "Full" 203k and Streamline 203k. The Streamline 203k program limits the repair costs to $35,000 and does not allow for structural changes/repairs to the property. The regular 203k program can be used to complete a full "gut-renovation" of a home.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services
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CFS Mortgage - http://www.cfs203k.com
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
No it's not particular harder than the standard FHA loan; however you will have to qualify. 203Ks are not offered by all lenders. Some lenders may have a tighter debt to income ration for this product, meaning the percentage of your debt in relation to your income and the home you purpose to buy.
Hope that helps.
Janet Nation, CBR
Sailing Home Realty
Licensed Real Estate Salesperson
800 315 8803
NMLS# 20743 - my licensing information
http://www.nmlsconsumeraccess.org/ - link to look up my license number