Deshawna Smi…, Home Buyer in Philadelphia, PA

What are some good questions to ask the loan officer when inquiring about 203k Financing?

Asked by Deshawna Smith, Philadelphia, PA Thu Jan 5, 2012

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Aaron Belliston’s answer
As many people have mentioned already the loan officer should be experienced in this product. Almost more importantly you will want to be sure that they have a great referral for the HUD 203k Consultant. This is not a glamorous position and most who are truly qualified to fill the role do not have a prolonged career in servicing these loans becuase of the relatively low pay. This results in the least capable and sometimes less than intelligent inspectors getting the work - which can be disastrous for your project. So be sure to confirm that the inspector you are getting stuck with has referrals on projects that have gone smoothly in the past.

Secondly, comes the contractor. HUD inspectors authorize draws on work completed, those distributions can sometimes take a while to get processed. You will need to ensure that the contractor you select, or if you elect to self-perform the work, has the financial wherewithal to carry the costs of the completed work AND continue working despite the turn-around time of the HUD inspector and the lender.

Visit this link for a thorough understanding of the 203k process:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/hou…

If you are in the LA area, I would be happy to take a look at your project and advise as necessary. My firm handles the sale and construction of certain types of 203k's and have referrals to qualified lenders should you need it.

Best of luck to you this is a truly great program when its used as it was designed to be.
Web Reference: http://www.bmrla.com
0 votes Thank Flag Link Fri Jan 6, 2012
Find out how many he/she has done in the past 12 months! It's not rocket science to do one, but there are some specifics that are important.
0 votes Thank Flag Link Fri Jan 6, 2012
Deshawna:

The most important question to ask any loan officer is: Can I have a list of referrals, people you have helped close a 203K loan. Then actually call these people and ask them about their experiences, both good and bad, during the process. You can also ask them, the actual customers, some of questions suggested below.

Also reach out to your realtor and have them reach out to their contacts & co-workers for a referral to a lender / loan officer who is experienced in this type of loan. Unfortunately, there are only a few loan officers who have much experience in area. I have used a Wells Fargo loan officer in the Sacramento area for loans in Los Angeles. He has been doing 203K loans longer than most loan officers have even been in the business. If you want his name and number, contact me directly.

Good Luck and Dare to Dream.

Shel-lee Davis, QSC®
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RE/MAX Palos Verdes Realty
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0 votes Thank Flag Link Fri Jan 6, 2012
Great answers here. You want a loan officer that has not only experience, but a 203k team in place. This is a difficult loan if you are inexperienced.

Dot Chance, Realtor®
Certified Distressed Property Expert – CDPE®
DRE License #01494182
Keller Williams Realty World Media Center
http://www.DotChance.com
818.339.7712

WHEN YOU THINK OF REAL ESTATE...Think DotChance.com! My business thrives from your referrals!
0 votes Thank Flag Link Thu Jan 5, 2012
You can start by asking about:

The mortgage company /bank's experience & knowledge as well as the loan officer
Time expectations on the process and release of renovation funds
Do they offer any assistance if needed after closing

Best of luck
0 votes Thank Flag Link Thu Jan 5, 2012
1) How many 203k loans has he/she done?
2) What problems has he/she seen that caused the deal to fall through-and how can you avoid them?
3) Are there any particular contractors he/she knows of that are particularly familiar with and comfortable participating in the 203k loans-and ones to stay away from.

Good luck!
0 votes Thank Flag Link Thu Jan 5, 2012
You want to make sure that they are direct endorsers. If not, closing may take a much longer time.
0 votes Thank Flag Link Thu Jan 5, 2012
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