The correct answer to this question would be that "it depends".
In some instances, an FHA 203K Renovation mortgage can be used to satisfy health or safety issues. The FHA 203K Streamline loan allows for an initial disbursement of 50% of the repair costs. As long as this initial 50% disbursement is sufficient to complete the health or safety the issues, then an FHA 203K Streamline can be used. If 50% will not be sufficient, then an FHA 203K Consultant mortgage will be needed.
You are right it does pay to use an experienced Mortgage Professional to help you through the home buying process; especially, where there are special types of loan programs being used.
Rodney,
I like your answer because it is true...every situation is different.
Ann Hayden in Wildwood, MO
Rodney - How timely! I was just asked this question today by one of my Realtor partners who took a listing that has issues (health, safety and code violations). We talked about letting me market it as a 203k in addition to him marketing it to a cash investor. More than likely, a 203k financed buyer will net a higher sales price than a lowball cash investor.
Ann....It does definitely differ.
Donne....It's great to see agents looking into the 203K as an alternative to a cash buyer. I just closed a 203K Streamline this afternoon.
Rodney - I much prefer the streamlines to the full -products. While I'm not the 203k pro that you probably are, I have enjoyed the ones I've done. They can be a challenge but like most things, I am getting better with time and experience.
Donne....I actually prefer the Consultant myself. To me, those are easier since I have someone who knows the FHA standards looking at the property in the beginning. With the Streamline, its seems as though some FHA repair item always gets missed which causes delays. I am suggesting the buyer use a Consultant for a least an initial visit on Streamlines to determine the potential FHA issues so that they all get covered.
I am sure you are quite well versed on the 203K too.
My company has two homes right now that we have fliers in the package for 203K loans. The homes will never go conventional and Donne is right, investors want the banks to give them away.
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