What is the FHA 203(k) Loan?
The FHA 203(k) allows homeowners and homebuyers an opportunity to purchase or refinance existing homes and finance 110% of the costs needed to improve the home! The 203(k) is ideal for neighborhood revitalization! This program is one of the fastest growing mortgage programs in the country.
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What you can do with the FHA 203(k):
☆ Include all repairs in the mortgage - with a minimum of $5000 in repairs
☆ Eliminate health hazards
☆ Put on an addition - add a second floor
☆ Remodel a kitchen, bathroom, etc.
☆ Replace Siding, roof, gutters, downspouts, etc.
☆ Update the plumbing, heating and electrical systems
☆ Install or repair the well and/or septic system
☆ Replace flooring, carpeting or tile
☆ Make energy conservation improvements: Double pane windows and doors, insulation and caulking
☆ Add a deck, patio or fencing
☆ Repair an existing swimming pool
☆ Replace free standing appliances
Get the answers to all of your questions!
Call Jeff Belonger to help you with your financing needs.
1-888-835-1663
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For more information on FHA loans, please go to this link. The FHA Expert You can also go to this group : The FHA Mortgage Group
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
Copyright © 2007 by Jeff Belonger
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For more information on FHA loans, please go to this link. The FHA Expert
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!
For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors
Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc
Jeff,
Greta Info on another Great Product!! :0)
Thanks,
Tom Weiss
For 110%....FHA is the best way to go!
:-)
Charlie.... for the most part, when I started in 1992, by 1994, I already was introduced to so many of these products. One reason why I feel like I know so many of them inside and out. It is true in what they say though, experience can go a long way.
Tom W. ...... Thanks for stopping by and for the compliment.
Kris...... yes, FHA is a great way to go. One thing that I didn't mention was that you can do this type of program on the conventional side. But it requires a little more money down. FHA is just a lot less money out of pocket.
Jeff,
I just took this class, and want to share with eveyone, that I think this program is going to be one of the best products in this market. You explained it perfectly. Great informative post.
Gary..... Glad that my explanation was something like your class.
Karen..... the only negative thing about the 203-k and the rehab conventional program is that you don't get the normal rates. They to to be about 1/2% to 3/4% higher in rates. Other than that, it's a great program to adding to your house or fixing it up, outside of a home equity loan.
Jeff,
Another good post with solid good ideas! Thanks, Fran
Jeff, I blogged about this a little while back, and I completely agree with you that it is a wonderful program that FHA offers!! It has helped several of my clients obtain their dream home, and also helped them avoid other potentially harmful scenarios as well (foundation, etc). What people should also know is that these Rehab loans (203k's) are not just limited to FHA; they are also available as either Construction loans or One-Time-Close loans as well for higher-than-loan-limit properties.
Again, great job with the awareness, as always! I look forward to more of your posts in the future!
Great information to know.... I can get my client to look into this option.... Thanks again Jeff...
Jeff - Can this program be used for Multi-Units (owner occupied or non-owner occupied)?
Thanks.
I've heard that the closing cost on FHA 203K is almost three times higher than conventional closing cost...is that true? What causes the difference?
CHUCK... so sorry for the delay..... yes, it can be used for 1 to 4 family as a primary residence tool. It can also be used in conjuction with a commcerical property, as long as there is a certain percentage used for living space and is primary. But not non-owner.
CLOSING COST...... why compare a 203-k to a convnetional deal? Wouldn't you be comparing a regular FHA loan to a regular conventional loan?
Now, if you meant the conventional rehab program, that is a different story. And to answer your question, no, the costs would be the same. The negative with a conventional rehab is that you need good credit scores and 10% or more down. FHA 203-k, the scores can be much lower and you still only need 3% into the transaction.
He is my guess.... the person telling you this doesn't know anything about the FHA 203-k or they aren't even licensed to do FHA loans period. And not all lenders that can do FHA can do 203-k loans or even know how. I know this for a fact, because in Califironia, many brokers say they can't do 203-k loans... but that they can do FHA loans. You need a true expert that know how to do the 203k loans and that their company is full equiped to handle them. I hope this helps some.
I am pursuing a property in the state of NJ. The property is 145,000 and my closing cost are coming to 15,000. I am getting this property using an FHA 203K with 3% down and my credit scores are all around 750 or 760.
CLOSING COSTS..... why don't you call me or e-mail me. It would be easier to discuss this. And possibly send me your good faith estimate, because I would be able to tell you what is a cost and what isn't. It just doesn't sound like it's been explained properly to you.
My e-mail address is : jbelonger@ihmci.com and my cell is 609-440-5133 thanks, Jeff
ANTHONY aka closing costs....sorry that I lost you on the phone. Please call me back at your earliest convenience. thanks, jeff
Hello! Just curious if the $5 is specific to lender or FHA. The lender that is offering this locally (and there is only one that we have seen offer this which is Taylor, Bean & Whittaker) states that there is no minium only a max of $35,000....
Amy:
FHA imposes a minimum of $5000 in repairs. (FHA Mortgage Letter 2005-59)
This is all very informative just started doing FHA Loans and there great!!! It is so much better than people make it out to be. Thanks Jeff your post are always so informative...... Keep posting...
Can a 203K rehab loan be used to repair the foundation, baffle on septic tank and aeration unit for radon in water? I'm in negotiations w/a bank on a short sale property w/cracks in the foundation. The bank has agreed to lower the sales price by $30K to cover the estimated cost of repair of determined health/safety issues. I'll have to come up with repair funds myself however.
Marcia.... to answer your question, yes it can. We just have to prove that a foundation was there previously, depending on how much has to be taken down and or repaired. If you would like to talk about this further, please don't hesitate to call me. I can be reached from 8 am until 8 pm Monday through Friday... and on the weekends from 11 am until 7 pm. I will say this, you need to be careful on what lender you pick to help you with your 203-k loan. Not all lenders and or loan officers are very experienced to handle this. Even if it's a well known lender, it comes down to the support staff and how experienced they are in handling these types of loans. my cell is : 609-440-5133 thanks, jeff
Thanks Jeff, my lender was unsure whether or not he can escrow funds on an FHA mortgage, even a 203K. He's an old friend of the family. Would it be okay if he were to call you? I'm sure he'd understand what you have to say a whole lot more than I. He works for a local bank here in CT (loan officer) and is a super nice guy.
Thanks again,
Marcia
Marcia... sure,he could call me. But why don't you send me an e-mail to this e-mail address... jbelonger@ihmci.com I wanted to mention a few things. thanks, jeff
Marcia... sure,he could call me. But why don't you send me an e-mail to this e-mail address... jbelonger@ihmci.com I wanted to mention a few things. thanks, jeff
A 203-K Loan is a wonderful product, especially in an age where rehab loans of any kind seemed to have died an unnatural death. My knowledge of the product is simply textbook.
But, to answer the title of the post, it can't do anything for you if your lender doesn't call or email you back. Just saying ...
I am applying for fha 203k loan for abotu 165K but I was asked to come up with almost 16k for the closing costs and all kinds of fees and god knows what else in that. but my question is that does fha 203k really cost this much? I thought the whole point of fha was to help people with low down payment. can someone advise me what to do? should I look for another lender or go with the conventional loan. any help would be appreciated.
Can someone post the list of estimated closing costs along with other fees that are involved? I would like to compare these fees to my estimate for me as buyer contributions toward the closing of the settlement. I think I am being ripped, but can't say for sure.
Will... sorry for the delayed response... my computer crashed last week and it hasn't been fun playing catch up. Please e-mail me at jbelonger@ihmci.com and I can help you compare your current situation. Thanks, jeff PS.. what state are you buying your home in?
I am looking at a house in Michigan the home is missing the front porch and back deck; needs a water tank and sink is missing in one bathroom, there is also minor repairs such as 5 missing lights 6 foot of unfinished wall that needs to be drywalled. The house had built in selves riped out leaving exposed drywall and a spot of floor is showing where the carpet went up the the shelf. Also 2 new windows possibly. This home is a modular can you do a 203K on this property and if so im having a hard time from my realtor understanding the inspection and not being able to get a loan because of these things? what is your opinion Thanks very much.
CLAUDIA... . no matter if it's a 203-k loan or a regular FHA loan, doing loans on modular homes are much tougher now and many investors are allowing this for now. I need to know what kind of modular home it is and how it was built. Also, I can't help you in Michigan, but I can highly recommend someone that might be able to help you out. His name is Drew Sygit and he can be found on here also. Click on : Drew Sygit Thanks and keep me posted.
I believe it would be a ranch home is what they would call it. I dont know how it was built but reading online at the diffrent types of modulars I am positive it would be a ranch. It is long horizontal and to me looks like a manuf. but without the peak in fornt.
CLAUDIA.... well, in any case, give Dre Sygit a call. I left his link above to his contact info. thanks and keep me posted.
Thanks for the referral Jeff. Claudia, you can contact me at 248-356-3739.
Hi Jeff,
Thank you for wanting to help but I was told by the loan officer we got that we could not due a 203k loan since we only want to spend 60,000 so finally he got ahold of me and said our best bet is to go RD and have a investor loan us the money. Agian thank for willing to help.
CLAUDIA.... please still speak to Drew. Just because that loan officer said that doesn't mean it's true. Some lenders just don't want to do lower loan amounts. It has nothing to do with the 203-k as much as it has to do with loan amounts. My suggestion? Even if you don't talk to Drew, find someone else. It could be that this loan officer and or their office is not good at 203-k loans either. I have seen some loan officers tell borrowers that a certain loan couldn't be done for a certain reason because they either didn't do them or just weren't experienced with them. 203-k loans are a FHA loan... so something doesn't sound right with his answer, which is why I suggest seeking someone else. The loan officers job should be to use the best mortgagt for you and not for them. It happens more than it should... I see it more than I should. thanks
Thanks Jeff, we will get a hold of Drew we live about 40 min away from Detroit in Port Huron so I know its away from his work but we will get a hold of him. I appriciate you letting me know that because I kinda thought that too but was not sure since I dont know much about lenders. You are a great help.
CLAUDIA... my pleasure... I just love what I do... and it does sound funny and for me, it's usually a red flag. I once had two different loan officers tell a borrower that going conventional with 10% down was cheaper than using her VA benefits. I told her that was not true and she said both of them said they ran numbers for her. I said, did you ever see the comparisons? She said no... I sent her mine and the VA loan was about $73 cheaper than the conventional loan. After doing some research, one of the lenders weren't even VA approved. Hence why some loan officers give you loans that are easier for them, but not always better for the borrower. I have a few of these stories, even worked with one guy that would put borrowers into subprime loans than FHA loans, just because it was easier for him. He even told me himself. Thanks