I have a "good news, bad news" answer for you. The good news first.....
I have a wonderful mortgage professional who could help you with a 203k "light" rehab loan. Their model is one that makes a lot of sense in this environment; that is, an environment where lenders are generally jittery and conservative, and where appraisals have given a lot of us fits in the recent past due to necessary compliance with the Home Valuation Code of Conduct (HVCC).
In general, their model is as effective as any model can be in this environment because:
1) They loan their own money (i.e., they are a "direct lender"), they don't just broker loans of other institutions' money. Though they CAN broker loans if necessary, having their own money to lend means more authority and control over the process..... no middle man.
2) They have local underwriters. You aren't appealing to someone who may not be familiar with local practices, market characteristics, and housing inventory. They're not located right in Berkeley, but at least they're Bay Area.
3) Finally, they have a "pool" of local highly-respected appraisers who have been working extensively in this area for years. During the first days of the HVCC, an appraiser from somewhere like Manteca might be assigned to value Oakland and Berkeley properties, and we had lots of weird, frustrating and downright incorrect results. That can still happen if you have a brokered loan with an out of area lender.
Now the bad news..... your Realtor may not have been referring to difficulty in getting the 203k loan itself, but in getting an offer accepted when you need a 203k loan. These loans add moving parts, complications and possibly time to the escrow process; in other words, risk. The hard fact of the matter is, there is a market for Berkeley property, and usually more than one buyer interested. It doesn't matter if the property is a short sale, a bank-owned/REO/foreclosure listing, or a normal sale. If a seller has a choice between a buyer with conventional financing and one with 203k financing, they'll take the one most likely to close escrow without hiccups. I can see how your Realtor might have indicated that it will be extremely difficult to buy a home using 203k financing in Berkeley.
If you're in the 94610 ZIP Code (I lived at Staten & Van Buren in Adams Point before moving to Berkeley 10 years ago), then you're likely aware of neighborhoods in Oakland that offer a fabulous lifestyle, but with fewer headaches than trying to buy in Berkeley. You might find more opportunity there..... though, in truth, multiple offers are common on many Oakland properties as well.
Best to you, and good luck!
Red Oak Realty