FHA 203K Loan

Asked by Buyer2222, 60463 Tue Dec 27, 2011

I already have an fha loan for the property I bought 6 months ago. I would like to add an addition to this property, and need the financing to do it. Will I be eligible for a FHA 203K loan? I am planning on using 30k of my own money and 40k from a loan. I have little to no equity in the home because I just bought it 6 months ago, so home equity loan is out of the question.

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8
Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Tue Dec 27, 2011
You should be fine with getting a 203K loan for your situation. Many lenders require six months seasoning on your current mortgage; but your mortgage consultant can confirm that. Work with someone competent with the 203K program and a direct lender (not a broker).

@Tim, Your comment is a direct reinforcement of agents who clearly have no real knowledge of lending practices; yet continue to offer financing advice. The FHA 203IK program is, most assuredly, available for refinancing borrowers. And the rules, or guidelines, associated the the 203K are really no different than a regualr FHA loan. I suggest you get in touch with a mortgage professional who can help you educate your clients properly; because, clearly, you are walking away from business because of your lack of financing options.
2 votes
Thomas Young, Home Buyer, Phoenix, AZ
Sat May 25, 2013
From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
0 votes
Eloanpro, , Chicago Heights, IL
Sun Jan 6, 2013
Every answer here has merit. So I just want to point out that the type of addition you are looking to add could drastically raise the value of your home. For instance, if you have a 2 bedroom home, a bedroom and a bathroom could raise the value of your home 40%( Who wants a 2 bedroom house?). ..and then as pointed out in one of these other mortgage answers, your new value is calculated at 110% of the after improved value. ...and then you can borrow as much as 97.75% of that new value. In theory you could have no equity in your current home or even be upside down. Everything is going to depend on what your home is worth after improvements.
0 votes
203k Guy, , Maryland
Thu Dec 29, 2011
You certainly can use the 203k loan to refinance and put an addition on a property. You must be an oowner occupant and the property will still need to be appraised. If you find a lender that allows the maximum LTV, you will find that you can actually get 110% LTV (loan to value) 203k rehab loan. This would probably save you from having to use as much of your own cash as you might think.

As always, find a 203k lender who SPECIALIZES in the FHA 203k program and find a good 203k Consultant to help you. I can get you a referral if you let me know where you are located (property address please) or you can contact me offline at vsimone@203kServices.com

Additional information can be found at: http://www.203kservices.com/faq.php

Good ;luck!
Web Reference:  http://www.203kservices.com
0 votes
David Leonard, , Madison, WI
Tue Dec 27, 2011
I would be more than glad to help you. 203K products can be used as a refinance in cases when the borrower has owned the property for less than one year. It is also acceptable to use the funds for a room addition. To get additional answers to any questions you may have or to get exact numbers with interest rate, payment, and term please call or email me directly. I am a licensed Loan Officer in the states of Illinois, Wisconsin and Minnesota.
Thank you,

David Leonard
NMLS ID #2848526
david.leonard@madisonmortgageguys.com
Toll Free: 877-240-5810
0 votes
Carl Henker, , 95928
Tue Dec 27, 2011
You may use a 203K loan to refinance and complete an addition, seek the advice of a 203K specialist in your area. You will need a full 203K loan and not a streamlined 203K. This is a great use of the 203K loan for home owners looking to do home improvements with little or no equity. Good Luck with your process.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Tue Dec 27, 2011
My guess is no. The 203K is for purchasing a house that needs repairs done that will increase its value, not for just an addition. Speak to a lender that offers 203k, they come with a lot of rules.
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Dec 27, 2011
FHA requires Owner/Occupant

Good luck and may God bless
0 votes
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