Can I get an FHA mortgage on a "fixer upper"?

Asked by phil, 60622 Thu Feb 11, 2010

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20
David Cruick…, , Palatine, IL
Thu Feb 11, 2010
Keith,

As seen by the other people who posted it is a 203K loan which I specialize in. I have an all informative website that discussed exactly how the loan works. Please visit http://www.203kloanschicago.com. If you have any questions after reading the material please let me know. I would be happy to get you qualified.

Sincerely,

David P. Cruickshank
Ardain Mortgage Corp
847-354-5455
davidc@ardain.com
2 votes
Philip Sencer, Agent, Chicago, IL
Thu Feb 11, 2010
Yes, but their is more paperwork and a bit more complicated process.Not all lenders are familiar with FHA 203K. Try Bradley Eggers 847-744-0168 Ardain Mort.

philip
1 vote
Daniel Mirea, Agent, Chicago, IL
Sat Sep 21, 2013
How do you buy a fixer-upper with an FHA loan?

Find a lender approved to do 203(k) loans. Shop with several to get a great mortgage rate. Get your mortgage application approved and get a pre-approval letter.
Find a property. Make sure that your offer contains language indicating that you need a 203(k) loan in order to complete the purchase.
Find a contractor to write an estimate of work needed and materials required. You aren't allowed to do the work yourself unless you are a professional builder.
Get your home and improvements appraised. There may be two appraisals required, since the value of the unimproved and improved property will need to be determined.
Your loan funds. When the loan closes, the seller is paid and the remaining funds are held in escrow for the contractor.The lender (or its agent) releases escrowed funds as work is completed.
Complete the repairs.
0 votes
Dana Lindberg, Both Buyer And Seller, Phoenix, AZ
Sat Sep 21, 2013
Getting a 203k loan is not always hassle-free. At times, the process can be lengthy. For more details about 203k loan, visit http://www.cfs203k.com. CFS Mortgage and RenovationReady brings together more than 50 years of traditional and renovation lending know-how. Let their team of experts help you.
0 votes
, ,
Tue Mar 9, 2010
Phil,

By now you've probably got all the answers you could possibly need or want but just incase...

As someone pointed out, renovation lending is about what the property WILL be, not what it is now. Outside of tearing down the house and rebuilding from scratch, you can do just about anything that's permissable under the umbrella of residential lending (as long as the city will give you a permit for it!!). There are loans available for rehab amounts both less than and greater than 35k. Most lenders can only do the streamline (less than 35k in rehab) but don't limit yourself there if you desire more work.

Since you didn't state whether this was for owner-occupied or investment, I'll touch on that as well. There are also products available for investment property rehab, both for single family, and multi-family AND condo renovation (interior only). There are quite a few high-rises that are not FHA approved that this product could be used for as well (both owner-occupied and non-owner-occupied).

I have over sixty posts mostly about Renovation lending in general and a published article on the subject. If you're still looking, feel free to reach out to me, I'm just down the street from you (my office is on North avenue, a block west of Sedgwick), I see you're in/near Wicker Park.

My contact info can be found in my profile.
Web Reference:  http://robweber.com
0 votes
Patty Harris…, , Naperville, IL
Mon Feb 22, 2010
Hi Phil:

If you need help with financing on a 203k streamline or regular 203k loan, please contact me and I would be happy to help you.

Best regards,

Patty Harrison
Smart Mortgage Centers Inc.
215 Shuman Blvd., #302
Naperville, IL 60563
0 votes
, ,
Sat Feb 13, 2010
You can absolutely obtain an FHA loan on a "fixer upper". As my colleague, David, mentioned, it is FHA's 203k rehab program. The lender's we work with have no property qualifications. As long as there are no structural changes in your rehab plan and the total funds needed are less than $35,000, you can use the streamline 203k program. Otherwise, there is still the regular 203k loan with which you can do just about anything...add an addition, move a wall, gut it out and start over, etc. In any case, Ardain Mortgage can help you with both. Feel free to contact either one of us at 847-963-1000. You can also read our CEO's blog at http://www.richardhartian.com

Bradley Eggers
Senior Loan Originator
Ardain Mortgage Corp
847-963-1000
bradley.eggers@ardain.com
Web Reference:  http://www.bradleyeggers.com
0 votes
Terry Perdue, Agent, Chicago, IL
Fri Feb 12, 2010
Yes, Its called FHA 203K. You have to go to a lender who is offering this type of loan for owner occupied properties. You may not be able to get this loan if you are purchasing as an investment property.
0 votes
John Sommese, Agent, Orland Park, IL
Thu Feb 11, 2010
Attention Realtors and Buyers!!! FREE yourself from the HASSLES of the FHA 203k loan. Try this 5% down CONVENTIONAL REHAB LOAN. The bank will allow the buyer to use up to $40,000.00 of the banks money for the rehab of the property. When the buyer is complete with the work, the bank will refinance the 1st mortgage (purchase price) and the 2nd mortgage (rehab amount) into one loan. The best part of this loan is that it can be closed in 30-45 days.

If you would like more information about this loan and the bank that offers it,
please feel free to call John Sommese at 708 860-0497.
0 votes
Mary Nack, Agent, Chicago, IL
Thu Feb 11, 2010
I would not apply for a 203K loan except with a mortgage broker that specializes in doing them. It's an awesome product - but a complex process that can easily go awry. I would strongly encourage you to call Ron Parello of The Rehab Man Mortgage. 90% of his business are the "K" loans. You can contact Ron at 708-415-8156 or at ron_parello@yahoo.com. His website is http//www.FindHomesAndLoans.com.

Hope that helps!
Web Reference:  http://mnack.net
0 votes
Gita Bantwal, Agent, Jamison, PA
Thu Feb 11, 2010
FHA has a great program called 203k financing which others have already mentioned. I would just like to alert you that there are going to be changes to fha program in general in April. You should talk to a loan officer as soon as possible . Look for guidelines at http://www.hud.gov.
There are resources for home buyers and inormation about tax credit as well.
Web Reference:  http://www.gitabantwal.com
0 votes
, ,
Thu Feb 11, 2010
Keith,

Obviously, you've heard a lot about the FHA 203k loan. However, depending upon what your definition of a "fixer-upper" is, it's conceivably possible to get a normal FHA loan on a 'habitable' home, and then do cosmetic repairs by yourself over time.

Your buyer's agent should be able to tell you whether or not a "fixer upper" would "pass" a normal FHA appraisal before you put an offer in on it. So you could try it that way first, and if that doesn't work, you can have the original FHA appraisal amended to do an FHA 203k loan.

Regards,


Matt Bukovy
Sr. Mortgage Consultant
Wintrust Mortgage
3317 W. Irving Park Rd.
Chicago, IL 60618
Cell 773-416-7107
Phone 773-654-2498
eFax 773-409-5558
0 votes
Ken Dooley, Agent, Chicago, IL
Thu Feb 11, 2010
Keith,

You've gotten plenty of information in the answers below. You can also go to the following page to get innformation directly from HUDat:

http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm

Best of luck,

Ken Dooley CIPS,ABR,TRC
Conlon: A Real Estate Company (312) 305 4919 cell
Search the MLS for your next home here: http://www.kendooley.idxco.com/idx/4302/mapSearch.
Web Reference:  http://www.KenDooley.com
0 votes
Simir Shah, Agent, Chicago, IL
Thu Feb 11, 2010
I just had a client of mine apply for a 203k loan, it seems like its a good option for this sort of purchase.

FHA 203(k) Definition
This FHA mortgage insurance program enables homebuyers to finance both the purchase of a house and the cost of its rehabilitation through a single mortgage loan. These type mortgage loans are more difficult to obtain in the market and are not offered by many mortgage brokers or mortgage bankers. Southwest Funding on the other hand provides FHA 203(k) financing allowing its loan officers to serve a greater number of borrowers.


Thanks
Simir Shah
0 votes
Matt Laricy, Agent, Chicago, IL
Thu Feb 11, 2010
Keith,
You can get an FHA 203k loan. But there is still some FHA guidelines that the house has to meet to get this loan. Good luck!

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
mlamericorp@aol.com
708-250-2696
0 votes
Lucid Realty…, Agent, Addison, IL
Thu Feb 11, 2010
Keith,

The answers below are all good ones. The one thing that I want to add is that there is some restriction to the type of repair allowed under this loan type. Make sure that when you talk to the lender - you review the changes that will be necessary.

I've written a few blog posts that you might want to peruse at blog.lucidrealty.com.

Best of luck!

Sari
Web Reference:  http://LucidRealty.com
0 votes
, ,
Thu Feb 11, 2010
So, what is the purpose of posting exactly what others did before you?
0 votes
Kurt Clements, Agent, Schaumburg, IL
Thu Feb 11, 2010
Keith:

It's called a 203k loan. It is an FHA loan that allows you to purchase a home as well as get money to rehab it all in one mortgage. Your downpayment is only 3.5% of the total amount you borrow.

You can contact me or email me for more details at your convenience.

Kurt Clements
Senior Vice President
GSF Mortgage
3933 75th St
Aurora, IL 60504

Office: 630.806.7016
Cell: 630.430.1091

kclements@gsf-mortgage.com
0 votes
Brenna Clark…, Agent, Oklahoma City, OK
Thu Feb 11, 2010
Have you checked out a 203K FHA? I have assisted clients with this type of renovation loan.
0 votes
, ,
Thu Feb 11, 2010
The loan you are probably looking for is an 203k loan, which is an FHA rehab loan. You can take out a loan for more than the purchase price, but you have to get all your estimates lined up before you close on the loan, and there are some other things that you would need to know. If the property requires less than $35,000 in repairs, you can do a streamline 203k, which just makes it a little easier.
0 votes
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