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Can you move a home from another site using the FHA 203k loan program?

By
Home Inspector with 203kOnLine.com, covering the USA S0289

I've always found it interesting to see a home going down the street on it's way to another site, just waiting for someone to throw out some dish water out the back door... lol , not really

In the case of moving a home from one site to another several things must be present to qualify for a 203k loan.

1) The house being moved must be on it's original foundation. It can't have been moved already to a storage site while awaiting a lot to move it to.

2) HUD engineering must observe the home on the present site prior to the move and at the new location once sit & bolted on the new foundation.

3) The mover's insurance must cover the home during the move. Look at the contract many movers have it suggested the borrower is responsible for damages up to $2,500, I don't think this will fly with HUD 

Once the home is bolted to the new foundation a draw payment can be made that covers the moving or transportation expenses to the site as well as the foundation per the 203k loan guarantee program.

The one we are doing right now is being moved onto a site that has a well and needs a septic system. In all cases the well and septic work must be part of the first draw or you may find you are waiting until it is. This sounds logical but years ago I was working on the first draw on a stick built home for a lender client. The home had a new foundation, the sub floor was installed, the well worked, and when I asked about the septic system was informed they hadn't started that yet.

I reported to the bank and told them I instructed the borrower to have the septic system ready for inspection at the next draw (not an FHA loan by the way). He agreed. I went to the draw 2 inspection to find out that they couldn't "perk" and a new "hillside" septic system is being installed at an additional cost of $70,000. I was shocked that they didn't have to pass the "perk test" prior to getting the building permits issued. Who would have guessed?

4) Permits is another issue, if you need permits on a job for the work that you plan to do... get them early. It might even save you a fine. I once had a fixer we had just foreclosed on. I had the property secured and hired a guy to mow the lawn. He called me and told me the building inspection department was pissed off at me and red tagged my building telling him he must STOP work and get off the property. 

I immediately went to the building inspection department and told them of the incident. They looked it up and said "yes, here it is with a note that you are hereby fined and must pay double permit fees".

I said okay how much do I owe you... they said it isn't that easy we need to make an appointment to visit the property to see just how much work has been done... I said bring it on.. so far we just mowed about half the front lawn. Some of these inspection departments are just a little wacky.

The inspection cost me $25 and the inspector was the same one who 'red tagged' the property. When she made the inspection and found no work had been done she was a little red faced. I asked her why she sent the lawn mower guy away.. it isn't typically permitted. She got a little more red. Life is fun, then you...

 

Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

To learn more about the FHA 203k loan program go to www.203kOnLine.comWhat is your fee? 

Got a 203k project giving you "fits" contact www.203k911.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..

877-207-6565  state your name when asked please, it is dialing me at the same time.

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Comments(4)

P.J. Virgilio Jr., Realtor 408-568-6578 Selling homes in the Greater San Jose area and South through San Martin, Gilroy
Keller Williams Realty Silicon Valley - Gilroy, CA
San Juan Bautista and Hollister as well!

Mike,

Thanks for sharing, too funny.... who knew!

All the best!

Aug 08, 2012 12:33 AM
Curtis Van Carter
Better Homes & Gardens Wine Country Group - Yountville, CA
Your Napa Valley Broker Extraordinaire

Mike

This is not something you run across very often but if it does happen, at least now I will know it is not so simple a process. Crazy about the inspector, cheers cvc

Aug 08, 2012 02:09 AM
Mike Young
203kOnLine.com, covering the USA - Stallings, NC
FHA 203k Consultant 916-758-1809

My client was and is working this in Berkeley and it is a cash cow for him. He rents SRO to teachers  at UCB.

Aug 08, 2012 01:34 PM
Charles Stallions Real Estate Services
Charles Stallions Real Estate Services Inc - Gulf Breeze, FL
Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl.

I can appreciate these timely post and now I know along with the other things you post on. Good luck and happy selling

Aug 17, 2012 01:47 PM