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Straight Up with Jocelyn Predovich: The Truth about FHA 203k Loans

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Mortgage Professional America | 01 Mar 2012, 10:09 AM Agree 0
The FHA 203k mortgage program provides home buyers the opportunity to buy and fix up a property, without exhausting their personal savings.
  • Phil Caulfield | | 01 Mar 2012, 11:17 AM Agree 0
    Another renovation alternative is the Fannie Mae Homestyle mortgage.
  • | | 09 Mar 2012, 07:40 AM Agree 0
    Great article Jocelyn, always pushing for more education in the FHA203k WORLD in your market. We still battle agents fighting resistance taking advantage of a clients inability to understand the program all for the sake of a commission that the agent thinks will disappear or take longer to close by using the FHA203k. Keep it up we need more of you, just not in my least not
  • FHA 203k | | 05 Apr 2012, 10:36 AM Agree 0
    Advice to Realtors and Homebuyers…if the plans are to use FHA financing then consider using a lender/mortgage officer who already can do and is experienced with the 203k. It will save you time and money by not having to start the process over again with someone else when property conditions are in question, something unexpected comes up or just a change in plans.

    Best of luck out there
  • r. lopez | | 11 May 2012, 07:50 PM Agree 0
    My realtor didn't know much about this mortgage. When she spoke with their lender she had said we need to be living in the home for 6 months, than get it appraised. Is this correct? I don't see this anywhere while reading up and doing my own investigating. They can't expect someone to live in a dump for 6 months than have it appraised, or can they?
  • Homes in Laguna Niguel | | 01 Jun 2012, 04:07 PM Agree 0
    This is about easing the pressure on borrowers in a responsible way, but still most of the borrowers who might like to use the program to refinance their mortgages are facing substantial hurdles. You need to have an unblemished record of on-time mortgage payments for the last 12 months. Maybe you were late occasionally a couple of years back. That's OK. But the last 12 months need to be pristine.
  • lisa scott | | 01 Jun 2012, 08:14 PM Agree 0
    It should have read, $1000 more per month on the mortgage because of added fees.
  • lisa scott | | 01 Jun 2012, 09:18 PM Agree 0
    processing admin, underwriting fee, appraisal fee, tax service, settlement service fee, supplemental origination fee, 203K consultant, 203K Architechtural and Engineering, 203K Permits, Email Fee, Sub Escrow Fee, Reconveyance, Title Wire, Lenders Coverage, Courier Overnight, Title Endorsement Fee, Signing Fee, Owners Coverage, Recording Fees, City/County Stamp/Transfer, Rehab Escrow Account, PMI, MI, Funding Fee, Discount Fee. We knew there would be closing costs of 12,000 but the mortgage per month rate is so high now, and we do need to pay closing fees.
  • Ray Masciangelo | | 10 Jun 2012, 05:43 PM Agree 0
    Great Read. Factually spot on. Thanks for promoting such a solid program Jocelyn. We have been working with the 203k mortgage for years. If you would ever like to write an additional article with a contractor I would be thrilled at the opportunity. Our family's construction (Masciangelo Construction) firm has received Paul Welden's certification and work daily with the FHA 203k Renovation Program. Thanks again for such a solid article, I will surely be sharing this with future clients and colleagues.
    Ray Masciangelo
  • Sean Thompson | | 10 Jun 2012, 05:47 PM Agree 0
    Of course not! You are getting this "you need to be in the house for 6 months" information for one reason and one reason alone. They want you to close ASAP so they make their money and what happens to you after that, ....well....they don't care about. Sorry to say, but you are experiencing the biggest issue facing Renovation Lending. Very few Real Estate Agents and Loan Officers know how to do the mortgage. So they do any and everything they can to talk you out of it. Call me if you need help. 732-672-5243
  • Ray Masciangelo | | 10 Jun 2012, 05:51 PM Agree 0
    They can not. The appraisal is ordered before settlement and then the contractor has 30 days from settlement to begin work on the renovations and typically they place a cap that all renovations have to be completed within 6 months. So long as the program is fully understood by all involved parties and they are experienced in the 203k it is a Great program. Best of Luck. Any other questions, please post.
  • Alyssa | | 08 Aug 2012, 05:01 PM Agree 0
    Are log homes included in this mortgage? I"m being told they are not but really want to purchase one that needs some work.
  • Leslie | | 14 Aug 2012, 09:59 AM Agree 0
    One question that I have not seen addressed anywhere in my research, is: Will a 203K cover buying and MOVING a house to my property to restore it there? My husband and I would like to buy an old farmhouse and restore it, but we aren't sure if a 203K will cover the cost of actually moving the home, as well as the restoration.
  • Ashley | | 15 Aug 2012, 02:08 PM Agree 0
    Leslie, not sure if this entirely answers your question, but I found this on HUD's website regarding 203K mortgages:

    "This program can be used to accomplish rehabilitation and/or improvement of an existing one-to-four unit dwelling in one of three ways:
    - To purchase a dwelling and the land on which the dwelling is located and rehabilitate it.
    - To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it.
    - To refinance existing liens secured against the subject property and rehabilitate such a dwelling.

    To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, mortgage proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation."

  • Tammy | | 23 Aug 2012, 10:00 AM Agree 0
    Thanks for the article. Although I am concerned about the fees the previous person spoke of, it did help me understand the mortgage better. We were just told about this mortgage for a house we would like to purchase that won't qualify for conventional or regular fha financing because the home owner is not willing to make any repairs. Our issue is that we have lived with family for the last couple of years and have no payment history even though we have been paying a small amount of rent. We just meet the credit score requirements and do have a little credit card debt, but no car or any other mortgage payments. Is there a way to qualifying without any payment history. Can't they just use the fact that we meet the dti requirements for the mortgage and for our overall debt and the fact that my husband and I have both been at our jobs for 5 years or more?
  • JC THRASHER | | 25 Aug 2012, 12:42 PM Agree 0
    "The most important problem to avoid is choosing an experienced FHA 203k Lender."

    Should read "The most important problem to avoid is choosing an [in]experienced FHA 203k Lender."

    Great article though, thank you for the information!
  • Allison | | 29 Aug 2012, 12:32 PM Agree 0
    Great Article!

    Question- I am trying to research this product to use it to purchase a home that we are very interested but needs some work. The work is minor cosmetic issues aside from the kitchen that pretty much needs gutted. From researching this product (specifically the streamlined FHA203k) I have not been able to determine whether or not you can do the work yourself without using a contractor. My fiance owns his own business and has been able to network with many other people that own businesses but are not licensed. Can his friends help us do renovations without being licensed? If not how is this mortgage different than the Home Style mortgage? Any help information appreciated.

  • Robin | | 04 Sep 2012, 11:59 AM Agree 0
    YES, we just had a log home rehabbed through a 203k mortgage - it was completed in Dec 2011. (FYI: Trying to refinance to a lower rate after a 203k mortgage completion is a nightmare though unless you work with a lender VERY familiar with these type mortgages - what a headache)
  • Heather | | 04 Sep 2012, 08:14 PM Agree 0
    I was reading what was written about the 203K Loan and I had a few questions. First off, if you finalize everything with the bank and then start the construction, what happens when you want to change something like linoleum to tile or laminent wood cabinets to real wood, do you have to go through the bank for this or would it be okay if you put your own money in? Can you change things on your own or have to go through the bank for everything and how lenient would they be to change the original request? It would be hard to decide on everything ahead of time because the prices of things change constantly as well as a woman's opinion...that was a joke, but things happen.

    My next question is I know some contractors aren't the easist to work with out there so what happens if there is an issue and the contractor quits or is fired? Can you switch to another or would there be a lot of red tape? Also, what happens if the streamlined (6 month mortgage) isn't completed within the six months? Would there be an appraisal once the work is completed if it took seven to eight months and the second check would be released once the work is finished or would the second part of the mortgage be null and void?

    I'm looking forward to any information you may have about the 203K Loan Program.

    Thank you!
  • melanie | | 11 Sep 2012, 03:11 PM Agree 0
    How do you find EXPERIENCED 203k lenders? We have been approved for an FHA mortgage but are now interested in looking at the 203k. Is it any harder to be approved for the 203k? Also, if you bid on a house for say 70k and you use the 203k mortgage is your down payment for just the 70k or do you then have to include the $ for the construction?
  • Jeff | | 12 Sep 2012, 11:15 PM Agree 0
    Great article! I have been researching this mortgage and I still have a question. Can the 203K mortgage be used to Refi my current mortgage and include cash to add an addition to our house? Can I refi based on the home value WITH the addition? Approx cost of addition would be 25K ish.
    Thanks for the help!
  • Joey | | 14 Sep 2012, 04:53 PM Agree 0
    I read through the HUD website and can't find anything that says it requires it to be a primary residence. I want to buy a house, fix it up and then rent it out. Do you have any links to the verbage indicating that it needs to be a primary residence? I only saw that for the 203b, not the 203k. Thanks in advance!
  • Shaida Tafreshi | | 15 Sep 2012, 07:05 PM Agree 0
    Fannie Mae's product is actually called Homepath. It is a great alternative to FHA 203K, as FHA's MI premiums have soared. You also can absolutely do a Homepath Renovation on an Investment Property for as little as 15% down.

    visit my website for details and contact information.
  • michelle | | 18 Sep 2012, 10:49 PM Agree 0
    I just read on a site that add ons were not allowed with the streamline, is that true?
  • John Kirkman | | 23 Sep 2012, 11:31 AM Agree 0
    We would like to cosign for our daughter to purchase a home in need of renovation that is located in Ojai, California. We have excellent credit and will financially underwrite all expenses, but she is recently divorced and starting all over so her finances will be limited. Would this 203k program work in this case?
  • Liz | | 09 Oct 2012, 12:27 PM Agree 0
    Did you ever get an answer to this?
  • Denise Haire | | 12 Oct 2012, 04:38 PM Agree 0
    I am trying to find a home. I would like to apply for the 203k to renovate for handicapped access, ie Widing doors, bathroom, kitchen and easy access to thr property. Will that be allowed?
  • jag | | 14 Oct 2012, 08:56 AM Agree 0

    Joey asked a legitimate question. I understand your issue with it. There are lots of people that, for whatever reason, currently cannot and may never be able to afford a place to call home that they can truely call "theirs". The rental business like all others, is made up of good folks and bad folks. You apparently make the assumption that Joey is one of the bad folks. It appears to me that Joey is just exploring different avenues to get into a (whether you want to acknowledge it or not) legitimate business. Your name calling in your response adds absolutely no value to this discussion.
  • jag | | 14 Oct 2012, 09:35 AM Agree 0

    After a cursory review of their website, I can't find that requirement either. I find an implication, but that's not the same as a requirement. The url I referenced is here:
    The closest I could find was the verbiage below which in my mind indicates that there's some possibility of using this for rental properties (although this seems to be geared toward multi-family units, just how many multi-family units can a landlord live in?):

    Seven Unit Limitation

    Seven Unit Limitation
    HUD regulations and policies state that a real estate owner/entity should not be allowed to rapidly accumulate FHA insured properties that clearly and collectively constitute a multifamily project. In general, a borrower may not have an interest in more than seven rental units (FHA, VA, conventional or owned free and clear of any mortgage) in the same subdivision or contiguous area. For 203(k) purposes, HUD defines a contiguous area as within a two block radius.
    The seven unit limitation does not apply if (1) the neighborhood has been targeted by a State or local government for redevelopment or revitalization; and (2) the State or local government has submitted a plan to HUD that defines the area, extent and type of commitment to redevelop the area. A restriction may still be imposed (by HUD) within a redevelopment area (or sub-area) in order to prevent undesirable concentrations of units under a single (or group) ownership. H U D will determine that the seven unit limit is inapplicable only if: (1) the real estate owner/entity will own no more than 10 percent of the housing units (regardless of financing type) in the designated redevelopment area or sub-area; and (2) the real estate owner/entity has no more than eight units on adjacent lots.

    You've piqued my interest in this. I'll get back with you if I find anything. I trust you'll do the same.
  • Dan Murray | | 17 Oct 2012, 05:26 PM Agree 0
    The jackass is you. Do a little homework and don't make assumptions. The banks just aren't lending and the ONLY people who are going to rehab/upgrade YOUR rundown neighborhood are people like me, who will pay for the work that hasn't been done and give people a place to live while OUR economy recovers and the banks start giving home mortgages again. If HUD offers money to help, they're doing it intentionally. Neither I nor Joey and not even you should apologize to anyone for asking the question. Sorry you have a problem with opportunities presented to people to put food on their own tables or, as you call it, make a quick buck.
  • Tammy | | 22 Oct 2012, 03:56 PM Agree 0
    What happens if once the repairs begin and the contractor finds issues that couldn't be seen during the inspection process (ex: electrical & plumbing in walls) and those repairs now go over your contingency funds?
  • Lesa | | 26 Oct 2012, 09:08 PM Agree 0
    Hello, I'm a first time buyer And I am looking into buying my home in the country and our FHA officer told me we have to buy a home in the town to get the mortgage is this true..We don't want to buy a home in town we do what it in the country.
    Plus I thought FHA lenders help you pay for the down payment and closing cost According to her they do and now she making me confussed Saying I have to say up for the down payment and closing cost. And then I question her about she telling me to go threw this bank and then I requestion her again and said what am I to do with that money and she reply saying use it to fix up the home..I don't want to bank mortgages for the same property to me that doesn't make any since?? Can you help
  • Mary Newton | | 27 Oct 2012, 06:24 AM Agree 0
    Hi, I have been told by my lender that the FHA 203K mortgage program has been discontinued. Is that true?

  • janice | | 27 Oct 2012, 02:53 PM Agree 0
    I am considering a house with a huge pool but want to either get rid of it or reduce the size. Can I use 203k for this?
  • John Osslund | | 29 Oct 2012, 02:23 PM Agree 0
    The 203k mortgage is very much, alive and well. With today's low interest rates, it can be used to fund home improvements for current homeowners and reduce their rate, as well as rehab for properties that are in need of repair for acquisition. It cannot be used for improvements relative to landscaping, swimming pool etc. BUT, depending on the structure of your transaction, you might put less down with the FHA mortgage, and pay for the improvements yourself, out of pocket!
  • Rebecca | | 30 Oct 2012, 02:08 PM Agree 0
    When visiting the HUD website for the 203k program, I came across a borrower eligibility section in the Q&A's. It implied that you have to be a first time homeowner. By their definition: A single person or an individual and his or her spouse who have not owned a home (as a tenant in common or as a joint tenant by the entirety) during the three years immediately preceding the date of application for the 203(k) mortgage. Any individual who is legally separated or divorced cannot be excluded from consideration, because the three-year waiting period does not apply, provided the individual no longer has an interest in the home.

    Are there any similar mortgage programs for those that already own a home?
  • Gene Zink | | 09 Nov 2012, 11:26 AM Agree 0
    We would build a Contingency Reserve account into the mortgage to allow for unforseen issues and cost over-runs.
  • RobynT | | 19 Nov 2012, 02:45 PM Agree 0
    I do not own a home, but I want to buy one in the state I plan on moving to in a few years since the prices are so low. I'd have to have someone living there until I move - would it be considered an investment property (and ineligible for 203k) since I wouldn't be moving right in?
  • Gene Livingston | | 12 Dec 2012, 11:49 AM Agree 0
    How much will $35,000 203K raise my mortgage payments? The Home is $80,000 with 3.5 % down. 30 yr mortgage. How much remodeling is too much for FHA 203 K ? The home is livable but needs remodeling and up dating.I am not too famaliar with these type of Loan, also is Wells Farge the only Company that really understands this type of mortgage? Thanks, Gene
  • frank sheehy | | 12 Dec 2012, 08:32 PM Agree 0
    Raising your note from 85K to 115K will be about $157/mo more ($359 vs $519). Many lenders offer 203K. Big box lenders (like Wells) use the program to train people so if you go that route be prepared for a "learning curve" and the bureacracy of a huge company. There may be alternatives but the 203K is a great product. The 35K amount is 1/3 of the value of the entire property so that may create some red flags. Ask a local Realtor for a referral for an experienced (10 yrs or more) mortgage broker before signing up with a bank. You need a specialist not a trainee for this type of deal.
  • House Design Plans | | 17 Dec 2012, 08:26 PM Agree 0
    Thank goodness this Informative article is interesting and clear..... Others I’ve read made me feel like I needed a degree to decipher them.... Thank you.
  • norberto | | 27 Dec 2012, 02:47 AM Agree 0
    hi. my name is norberto. im new in the home owners. i buy 2 multi family units on the same lot. we pay cash. and got stuck with no help to remodel these houses. me and my family live on the property. and also have 2 units generating income. i was able to get some funds from family in dom.rep. but because of my bad credit i have not got no help from nobody here in the u.s.a i wish someone can see the before and after pictures to see what i have done to this property. but im still in a sittuation that i need to do some foundation work and also want to do an ad on. im on s.s.i and as i said both houses are paid for. if you know of someone who can guide me in a right direction i will highly appreciate it. thank you.
  • Alma Kee, Realtor in Tampa | | 29 Dec 2012, 11:31 AM Agree 0
    Freddie Mac does have a HomeStyle renovation mortgage that works similar to a 203k and it can be used on any property, not just those owned by Freddie Mac. With the Fannie Mae HomePath Renovation mortgage it can ONLY be used to fix a Fannie Mae owned property.
  • Jerry | | 03 Jan 2013, 01:34 PM Agree 0
    I am going thru an fha203k streamline right now, my lender says I need a ''licenced contractor'' for ALL repairs, is that true??
  • Josh | | 07 Jan 2013, 03:32 PM Agree 0
    Great info - helped me a great deal (in Florida) and motivated my step-daughter to contact you so she can buy her first home in Denver. Thanks.
  • Brian | | 09 Jan 2013, 11:20 AM Agree 0
    My bank recently told me the same thing. What ive researched sometimes differs. I came here in hopes for an answer. I'm unsure why it would be required to hire a contractor since either way a building inspector has to approve the work.
  • michael angel lezcano | | 10 Jan 2013, 01:08 PM Agree 0
    the FHA203K is a great resource for moving houses that normally would be left for the "sharks" (investors) to pick up and then improperly rehab as cheap as possible, with no knowledge of building codes and usually no inspections. the great thing about the 203K is that it doesn't need to be an older home ( 1 year old or more qualifies) to be considered, and also you can use the program if you refinance and rehab as well. i have done several renovations in the Tampa/St Pete area, and the new homeowners are very happy. they get the house of their dreams, and i get to work! what a concept, but it is really an honor to help these customers out.
  • Jennifer | | 20 Jan 2013, 08:55 AM Agree 0
    Hi. Thanks for the great article. We currently have an FHA mortgage on our home. The tax assessor's value of our home is 91k, and our payoff is around 69k. We still owe 17 years on our home. We do not have any late payment on our mortgage. Our home is in desperate need of some repairs. We have tried refinaning to a conventional mortgage and taking some cash out, but were denied because of 2 medical debts in collections on our credit report. Would this be a viable program for our situation? We estimate the necessary repairs to be around $12-$15k. We are willing to increase the term of our mortgage back to 360 months to keep the payments affordable to us. Also, we would like to keep out of pocket expenses to a minimum. Do you think this would be a viable program for us?
  • Heather | | 26 Jan 2013, 10:08 AM Agree 0
    I'm trying to purchase a home using a 203k mortgage. Was just denied by the first bank, because the home is "incomplete". I'm trying to make sense of this before we proceed with another bank. The previous homeowner started renovating the house in 2007. He ran out of money and the house went into foreclosure. The permits he pulled were approved through rough in, but they are still open (they need final inspection). The house itself was built in 1987 and has been 100% homestead since then (up to when the foreclosure happened). I read that the home must be 1 year old, and I'm trying to determine if this house (because it does not currently have an occupancy permit) would qualify.
  • K lender | | 27 Jan 2013, 06:15 AM Agree 0
    The home has to be at least one year old and have had a use and occupancy issued. This means the 203k can't be used for finishing new construction but yours doesnt sound like a new home. Ive closed many where the buyer came in and finished the renovation of the previous owner who went to foreclosure. I'm wondering if you aren't getting the whole denial reason. You could also look at using a Fannie Mae homestyle mortgage (think of a conventional 203k) where the home need only be substantially complete - this is a better option for new construction that is unfinished. The Dow payment is larger though, than that of the FHA.
  • Eleni | | 29 Jan 2013, 05:25 PM Agree 0
    When do you start paying the mortgage? when all the fix ups are done or right from the getgo?
  • Eleanor | | 31 Jan 2013, 09:52 PM Agree 0
    I found my dream house, a 1920's waterfront cottage in a small town in Eastern NC listed for $299K. It needs TLC including all new windows, kitchen, bathrooms and probably HVAC and plumbing, but it has tons of charm, good bones, the lot is incredible and water views are to die for. I have owned and fixed up a dozen homes and it would be a dream come true to live in and rehab this house. I have been through bankruptcy but it was discharged 2 years ago and I am back on my feet ready to own a home again. Can anyone give me the name of an experienced 203k lender in North Carolina that deals with water front properties? I am so smitten with this property that I must give it a shot. I have some cash for a down payment.
  • Sabine in St Pete | | 12 Feb 2013, 04:04 AM Agree 0
    Great job! I LOVE LOVE LOVE this program! I am using it as my niche market. The most amazing thing is that even though you take buyers out excited as heck about going this route, into it they often magically find the right home & close using a traditional FHA mortgage! Go figure...

    Do you lend in Florida? I have one lender here that I trust, but he is so busy running around doing training seminars at various real estate boards I am questioning his ability to stay on top of the mortgages. Looking for an awesome experience alternative, because you are correct, the right lender is ABSOLUTELY ESSENTIAL!
  • Sabine in St Pete | | 12 Feb 2013, 04:06 AM Agree 0
    Just like any mortgage, you pay from the getgo...but if you are doing a major rennovation, you can defer your payments for 6 months (biggest reason for the 110% of appraised value). Helps a person that is still paying rent somewhere wait out the rennovations without paying both rent & a mortgage.
  • Sabine in St Pete | | 12 Feb 2013, 04:20 AM Agree 0
    My favorite example is a past client that was looking for a larger home. They found the perfect 4br/3ba pool home right next to a park. They were totally against the FHA 203k mortgage program when I explained it...even as I talked about "this house is a perfect 203k example!" They resisted.

    Then I showed a house they found online, I was first to arrive and looked around...OH MY! It was a foreclosure, huge amazing ceilings, awesome floor to ceiling fireplace, u-shaped house around the screened pool, huge master suite with amazing closets, large 2-person hydro tub, plus 2-person shower, plus dual sinks, large addition with it's own bath & could be mom-in-law or man cave...simply awesome...except for one thing.

    Remember I said this was a foreclosure?? When the previous owner left, they stripped everything! I mean EVERYTHING! The only thing left were two bathtubs (fortunately the nice hydro tub was one of them!). When my clients arrived, I reminded them of the line in the listing that said "create your dream kitchen" and asked if they noticed this and the fact that there really weren't many pictures online. They figured they just needed to re-do the kitchen. I invited them to proceed.

    When the wife reached the kitchen she absolutely freaked, it got worse as she moved along to bedrooms, baths, & the green pool (and I don't mean environmentally safe!) After they arrived back in the living room, I asked them to now imagine what THEY would do to the house. How would they rebuild it??

    This got the juices flowing...perhaps because they had a clean slate to work with! Bottom line, they purchased the house, utiliized the program to borrow up to the max FHA mortgage limit and then put about $30k of their cash into it (which they were saving for a downpayment) and now have a gorgeous home in a perfect spot with about $30k equity! I LOVE this program!
  • Jason in Denver | | 14 Feb 2013, 10:30 PM Agree 0
    Is it still accurate that the HUD $100 down program can be used in conjunction with a 203k mortgage? Does a repair escrow on the HUD property affect this?
  • Ashley | | 17 Feb 2013, 05:09 PM Agree 0
    So, i saw that a buyer used this mortgage on an episode of HGTV's House Hunters show. My husband and I are trying to sell our home in hopes of moving closer to where I work. We have a house in mind but our realtor has already mentioned that a traditional rural development mortgage will be VERY tough to do on the home because it is a short sale. We are really needing 100% financing as we plan to put what little savings we have into this home. After reading this article, I am thinking we may could use that money for the down payment and get more money out of this mortgage to do more renovations to the home. My biggest concern is getting this mortgage to work with a short sale...our realtor has told us that, in order to close on our mortgage, the home must pass inspection. The problem with that is the central heat and air unit has been stolen and the home has broken windows. In order to close on the mortgage, we would have to put in the heat and air unit as well as fix both of the windows. The catch to that is the current mortgage on the home (being a short sale) will not allow any work to be done on the home before closing. So, we are "up in the air" on how we are going to make that work. With this mortgage, can the work be done after closing and will it work with the stipulations of the short sale? Thanks!
  • Marilyn | | 18 Feb 2013, 04:05 PM Agree 0
    Can someone recommend a lender with 10+ years experience in the FHA 203K mortgage process in the Tampa Bay Florida area?
  • Candy | | 20 Feb 2013, 04:41 PM Agree 0
    Ashley, this would be a great mortgage for your situation. All of the work is done after closing. You have to have a contract with the contractor spelling out exactly what will be done to the house. The problem with the short sale is that the seller's lender has to agree to the sale and many agents, sellers, etc are not familiar with the program and are suspicious of any program that is not an easy straight conventional mortgage. Anytime you add additional steps to the process you run the risk of a problem, and this program has several additional steps. However, if you have the patience for dealing with the renovations and the additional work, it is a great program and can help you make the perfect home out of a so-so home. It can not be stressed enough that the secret to doing this successfully, is to find a lender experienced and knowledgable about the program.
  • Candy | | 20 Feb 2013, 04:42 PM Agree 0
    FHA allows it, but most lenders do not.
  • Nancy Viejo | | 22 Feb 2013, 09:11 PM Agree 0
    Marilyn, I am a broker in NW Fl but have done mortgages in the Tampa area. I am one of the only brokers that does FHA 203K streamline mortgages in my area. If you have questions that I might be able to help with please reply.
  • Nancy Viejo | | 22 Feb 2013, 09:25 PM Agree 0
    FHA mortgages are for primary residences. The rental/multi family is not the traditional 203k that a lender could offer. This is not for individual rental properties.
  • Nancy Viejo | | 22 Feb 2013, 09:32 PM Agree 0
    The 203K streamline requires a licensed contractor for all work, there is no inspector on the streamline. The Full 203K does require both. If the potential homeowner is a licensed contractor he/she could be considered.
  • Alicia | | 26 Feb 2013, 12:43 AM Agree 0
    Hi Nancy,

    Is it true that 203ks are only for first time home buyers? What happens if you use all the money set aside for the mortgage in your construction, can you just pay it back right away? Thank you!
  • Lorraine | | 27 Feb 2013, 05:48 PM Agree 0
    We bought a 1924 craftsman in fall 2008 for $130K and borrowed an additional $78K on a 203k rehab mortgage, closing the mortgage at $221K at 6%. The first issue was the County Property Appraiser only shows the sale price of the home $130K, shows no improvements to the home since 1990 and the current value at $100K. The banks won't even discuss a refi to a lower interest rate because it appears we are so underwater. They are using the County appraisers site to get an approx value of the home. Permits were pulled for everything, all new plumbing, all new electrics, new roof, central heat and air, new kitchen and bathrooms. Essentially a new house. I'm worried if I ask the county to look at their appraisal my taxes will shoot up, but I'm not sure how to solve this problem. The post rehab value was $225K, but really I have no idea what my house is worth.
  • Megan | | 02 Mar 2013, 09:33 PM Agree 0
    I own my home. I need to do some major work on it. -The foundation for half of the house needs to be replaced. I'm a military Veteran, what are my mortgage options for fixing and remodeling my home? As it currently stands the home and property is worth approximately $275000.
    Thank you.
  • eric | | 03 Mar 2013, 09:16 AM Agree 0
    WOW! He must be good if he has a gmail account and is god fearing....twice! This would be a prime example of a scam, people.
  • Sarah | | 05 Mar 2013, 07:29 PM Agree 0
    The retail analogy nailed it right on the head.. cheap prices are one thing but people who are genuinely searching for a house on it's last legs just to renovate are few and far between.
  • Marianne | | 25 Jul 2013, 09:55 PM Agree 0
    If anyone says they are financing 100 percent of the cost of the home then you are not in a financial position to be buying a home, let alone a short sale. You must put a lot down on a short sale as the bank doesn't want to deal with someone who will foreclose again. The American Dream is just not for everyone and you must wait until you can afford it like I did and like responsible citizens should do. You are only going to wind up screwing your neighbors when you foreclose in a year.
  • Brett | | 17 Aug 2013, 07:24 PM Agree 0
    Where can one find the official ineligible repair list Jocylen referenced as landscaping & outdoor luxury items. I've hit a snag with my lender who is saying granite counters are ineligible. I've not been able to find a complete list anywhere to double check. The reason I'm double checking them is I've already been told things wrong that i've disproved so I could move forward.
  • Stella | | 05 Jun 2014, 02:01 PM Agree 0
    It is the change in the laws relative to mortgage insurance premiums that make this untenable. Mortgage insurance is adding $200 to our monthly payment on top of the repairs on the home we own! Good luck, too, finding reputable lenders who actually do 203k mortgages. FYI, Quicken, does not!
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