Contractor Directory for the FHA 203(k) Loan
This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.
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.
"... designated for houses that are damaged or sorely in need of rehabilitation. The loan covers not only the cost of the property but also the cost of necessary home repairs. The down payment requirement is low, and eligibility criteria are loose. Homeowners whose homes need improvement can also refinance with these loans. A vast range of repairs, including room additions, bathroom remodeling, roofing, flooring and air conditioning systems can be funded with these loans.
Which houses qualify?
There are two types of FHA 203k loans, regular and streamlined. Regular 203k loans are for homes that need structural repairs, and streamlined loans are for those that need non-structural repairs.
In order to qualify, homeowners must plan to live in the home they are repairing. The following types of residences qualify:
Tear-downs: As long as part of the foundation will remain, houses that need to be destroyed and rebuilt are eligible.
Existing construction that is at least a year old.
Single-family, two-family, three-family or four-family dwellings.
Condos: if they have been approved for FHA loans.
Mixed-use properties: If you are repairing only the home portion, a mixed residential/commercial property can qualify.
Homes needing to be moved to rest on a new foundation."
I mainly use 3 consultants:
All 3 prepare a thorough work write up. Any of those three would be able to do the consultants work in Beverly.
Rudy sets out the "Streamline K" loan fairly well and Andrew reminds you that the original loan product is available for larger projects (look at it like the parent and the child program of rehabilitation). The Streamlined K is for small easily fixable items: Roof Repair, Appliances, Painting, etc. The Standard K is, among other requirements, for repairs that require structural changes, larger loan amounts, etc.
With respect to items and how they're added to the list of repairs, there are certain elements of the home that will need to be inspected and considered mandatory. The government encourages you to seek the an experienced individual who will guide you through the rehab. The best advise is to hire an approved 203(k) Consultant.
Find a consultant near you by searching the HUD database: https://entp.hud.gov/idapp/html/f17cnsltdata.cfm
Join the 203(k) Forum @ http://www.203kforum.com
I am a local Mortgage Banker in Massachusetts that specalizes in this type of mortgage program. I would encourage you to have a conversation with a qualified lender about how the loan works as there are many detailed steps in the process. It is important to understand the 203k program to determine if it is right for you or not.
Feel free to contact me if you have any questions. Good Luck!
FOR THOSE CONSIDERING a 203k loan, this blog is dedicated to explaining the guidelines and necessary steps required:
- Buyer must qualify as they would for a typical FHA 203b loan
- Like Up Front Mortgage Insurance (UFMIP) the cost to do the repair/renovations are rolled on top of the loan and the buyer must qualify for the new total loan amount.
- Interest rates for 203k are higher than the standard FHA 203b.
- Loan limit is up to 35K.
- PA has to state that the buyer is seeking a 203k, and that the contract is contingent on lender approval.
- Estimation of repairs/updates has to be submitted by a licensed contractor approved by the lender.
- Contractor has to begin repairs within 30 days of the close and must finish within 30 days of the estimated time to complete the work.
- Upon completion of work, the appraiser that previously inspected the home comes back out to reinspect the completed work for FHA compliance.
- If not already occupying property, buyer then takes full possession of home and moves in.
* Roofs, gutters and downspouts
* HVAC systems (heating, venting and air conditioning)
* Plumbing and electrical
* Minor kitchen and bath remodels
* Flooring: carpet, tile, wood, etc.
* Interior and exterior painting
* New windows and doors
* Weather stripping & insulation
* Improvements for persons with disabilities
* Energy efficient improvements
* Stabilizing or removing lead-based paint
* Decks, patios, porches
* Basement completion and waterproofing
* Septic or well systems
* Purchase of new kitchen appliances
* Purchase of washer and/or dryer
* Landscaping or yard work
* Major remodeling
* Moving a load-bearing wall
* Room additions or add-ons to the home
* Fixing structural damage
* Installing swimming pools
THEN submit a loan application loan officer will review your financial provide you guidance required.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
this is a popular program for someone looking to buy a home where it is need of repairs to make it habitable again. The qualifying for this loan is the same as if you were qualifying for a regular FHA lona. The only difference is you are rolling into your loan the cost of repairs needed to get the home fixed.
the process is a little more lengthly as well. You have to get quotes from reputable insured contractors for the repairs to be done to the house. generally the attorney doing the closing will hold the money for the repairs in an escrow account. You have a defintive time frame form when you close to get the repairs done to the house.
The program is great but requires a lot of work up front from the buyer to get everythign lined up....Then you need to find a bank that does them. Not all banks do a 203k loan.
These can be complicated to do and will take longer than a regular loan to close. You have to get estimates from contractors and then you take out a mortgage for the purchase price plus the repair costs. The bank will then give the money to the contractors as the work is done.
For qualification, you have to be able to afford the mortgage and you have to find a bank who does 203K's. not all do it.