Home Buying in Cleveland>Question Details

aday, Home Buyer in Cleveland, OH

with a 203K streamline loan do you have to refinance after the work is complete?

Asked by aday, Cleveland, OH Mon Dec 22, 2008

I am a first time homebuyer. My wife and I are looking at a fixer upper w/a 203K Streamline Loan. My question or concern is are we required to refinance after the work is done at the new appraised value?
Thanks for your help!

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Hi Aday,
Congratulations on deciding to take advantage of the unique & wonderful opportunities that are out there for 1st time home buyers. We have fantastic mortgage rates and the 1st time home buyers tax CREDIT that will be available through the first half of 2009.
What areas are you looking in? What type of homes are you most interested in?
The 203K program is an FHA product. When you are applying for your FHA mortgage, you will also be applying for your repair dollars. When applying, the dollars are for the projects that you are going to do to improve your home.
The dollars that you borrow on this will be part of your original loan application.
Not all lenders make FHA loans. And not all lenders that make FHA loans also make these 203K loans. Sometimes these loans can get difficult to administer. I would be happy to furnish you the names of several lenders that I deal with that are very adapt lenders. They know how to work with their clients to have these products best serve the client's situation.
I have a FREE information booklet prepared for 1st Time Home Buyers that will explain the home buying that I would be happy to send you with no obligation. You can call me at 440-487-2193 or e-mail me at jwirsing@kw.com to request your FREE Home Buyers Guide.
Best of LUck!
0 votes Thank Flag Link Mon Dec 22, 2008
The appraiser will have a list of the repairs that you are making to the property and will appraise the home at the improved value. (value after repairs) This is a link that will help you better understand the process:

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
0 votes Thank Flag Link Mon Dec 22, 2008
No, you do not need to refi once the work is done. However, don't expect a rate on par with current levels with the 203k. The main reason being that the loan cannot be sold to FHA until the work is done and the property is compliant. Since that can be up to 6 months, there will be an adjustment to the rate to account for that time factor. However, you should still see a great rate/program.

If you have any questions on the 203k program, let me know.

Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com
0 votes Thank Flag Link Mon Dec 22, 2008
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