Been getting a lot of calls on this subject of late so I thought I would offer some insite on selling the 203k loan program.
1) This is a renovation loan product. What would you compare it to? Any other renovation loan product. In my opinion it is the best rehab loan product on the market. What are your options? You could purchase a property that needs work, close the loan, then go find the money to fix it up. What you would find is a "construction loan" typically charging you points and fees and an interest rate from 12-16% with a requirement that you pay it off in 9-12 months.. fun huh? So when you compare this to a permanent loan with an intrest rate of about 5.5% fixed for 30 years to purchase and get the money to renovate it is a VERY inexpensive way to get your property fixed up and not have to pay points 3 times and closing costs 3 times. This is a "no brainer" in my opinion for anyone looking to buy or refi and fix a property.
2) Go to contractors who get jobs all day long.. on some days... let them know you can offer financing solutions for their projects larger or small. I just had a contractor call me with a $150,000 job he got on his own. Wow, my lender teammate will refinance the home and rehab for a new loan amount of about $450,000. Nice...
3) Call FSBO sellers and let them know you can finance their sale. If there home is pretty but too small let them know their buyer can make a room addition after it closes and the seller gets paid and moves on before the work begins. FSBOs are a great source for new loans. Even if the home doesn't NEED any work, you can add a garage, add a room, fix any part of the home that is getting older and it falls into the 203k category of loan products.
4) Home inspectors are a great source for loans. They are in the trenches and see first hand that a deal is falling apart due to excessive findings... while they get blamed for "killing the deal" that is just a knee jerk reaction to what we all know is just doing their job. I coach them to say "this deal is Perfect for a 203k loan". I'm always offering to speak at home inspector group meetings. Let them know what you do and keep those deals together
5) Firemen and Fire Women see a home first when it needs repair after a fire. Insurance pays off, you make the loan to fix it up and let the borrower's keep some of that money in their bank or use part or all of it and make a room addition or other updates at the same time.
6) Realtor associates and referral partners... I happened to be in an office recently when I overheard a deal falling apart because the septic system had failed and the lender won't make the loan. Apparently the sales contract had a seller credit to make the repair but the lender wouldn't consider doing that. The solution was to reduce the sales price and let the buyers do a 203k. So, educate your Realtors and agents to the FACT that 203k loans can save their deals.
Hope you will find this helpful and please feel free to contact me if you have any deals that may be falling apart, I'm always there for you to show you why it is likely "perfect for a 203k"
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