FHA 203k: the Good vs. the Bad

By
Mortgage and Lending with AnnieMac Home Mortgage NMLS #38670

I am a firm believer in that the FHA 203k renovation loan creates amazing opportunities. That is not to say that it is the perfect loan for everyone in every situation. Let’s take a look at both the good and bad aspects of an FHA 203k loan and see how it weighs out.

 

The Good

 

  •        Renovations can be anything from paint to kitchen appliances to adding an addition or even adding a second level to your home
  •        3.5% down payment of the purchase price plus renovation costs
  •        Roll in all renovation and purchase costs into one low fixed interest rate
  •        Potentially gain instant equity
  •        Lower interest rates compared to construction loans
  •        Finance up to 6 months worth of mortgage payment s if the home is not habitable during construction
  •        Loan amounts can be based off of 110% of after improved value
  •        We can go to higher debt to income ratios (DTI) and credit scores down to 640

 

The Bad

 

 

Conclusion: Good!

 

 

While an FHA 203k loan does take a couple days longer and does have more moving parts than a conventional mortgage, it is still a great option to help you customize your house the way you want. Being able to finance your renovation costs into your mortgage, gain instant equity, and landing yourself in the home of your dreams is why the FHA 203k is one of the greatest mortgage products around and should be at least offered to you and considered.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Improvement
Groups:
The FHA Mortgage Group
FHA 203-k and FHA 203-k Streamline Loan Group
Tags:
fha 203k
fha 203k mortgage
fha 203k rehab mortgage
fha 203k renovation mortgage
nj fha 203k

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
1,078,155
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

We have a separate division just for 203ks with dedicated underwriters at AnnieMac Home Mortgage.

Jun 19, 2014 07:29 AM #1
Rainer
33,897
Jeff Onofrio
AnnieMac Home Mortgage - Mount Laurel Township, NJ
FHA 203k Lender and Homestyle Reno Specialist

Yes we do!  Thanks Jeff! 

Jun 19, 2014 07:34 AM #2
Rainmaker
192,404
Diane Beaumont
Benchmark Mortgage - Woodland Park, CO
USDA,FHA,Jumbo,VA Woodland Park, CO Mortgage

We've done many 203K deals.  It's a must to know what one can expect going into this kind of loan.  Excellent blog!

Jun 19, 2014 08:48 AM #3
Rainmaker
232,347
Sarah, John Rummage
Benchmark Realty LLC, Nashville TN 615.516.5233 - Nashville, TN
Love Being Realtors® in the Nashville TN Area!

I am hearing more about renovation loans, and they seem a useful solution for a buyer who finds a good house which will be a great house with some repairs and upgrades.

 

Jun 19, 2014 10:10 AM #4
Rainmaker
196,890
Randy Shamburger
Movement Mortgage - Greenville, SC
FHA, VA, USDA and Conventional Mortgage Expert

Great information, thanks for sharing.

Have a Big day,

Randy

Jun 19, 2014 05:54 PM #5
Rainer
33,897
Jeff Onofrio
AnnieMac Home Mortgage - Mount Laurel Township, NJ
FHA 203k Lender and Homestyle Reno Specialist

Thank you all for the comments!  Have a great day! 

Jun 19, 2014 08:53 PM #6
Rainmaker
572,892
Bill Reddington
Re/max Southern Realty - Destin, FL
Destin Florida Real Estate

Don't have many FHA deals in this market. Have lots of VA buyers here and VA has a program also. The loans are doable but lots of work.

Jun 20, 2014 08:52 AM #7
Rainmaker
411,476
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

The 203k loan is an under-utilized tool. Many buyers could create equity by using the FHA/203k loan to buy and renovate homes that need some work.

Aug 10, 2017 09:29 PM #8
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
33,897

Jeff Onofrio

FHA 203k Lender and Homestyle Reno Specialist
Ask me a question
*
*
*
*
Spam prevention

Additional Information