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FHA 203K Loans

By Terri Poehler

Real Estate Agent with Realtor DRE# 3163817

June 30, 2012 09:55 AM

FHA 203K

Handy Man Specials

Keep running into houses in Broward County that need work before you can even move in? Well, there's an FHA program that will take care of that for the ready buyer! The FHA 203(k) loan is available from approved FHA mortgage lenders nationwide, providing the borrower plans to live in the home. The downpayment is approximately 3.5 percent of the total loan amount including repairs. The Department of Housing and Urban Development lists the following steps to secure an FHA 203(k) loan:

• The first step for a potential homebuyer is to find an appropriate fixer-upper and execute a sales contract. Before bidding however, a buyer should a do a feasibility analysis of the property. The contract should then state that the buyer is seeking a 203(k) loan, and that the contract is contingent on loan approval based on the additional required repairs.

• The homebuyer selects an FHA-approved 203(k) lender and submits a detailed proposal on the work that will be done, along with a cost estimate for each repair or improvement.

• An appraisal will determine the value of the property after the planned renovation.

• Once a borrower passes a lender’s credit-worthiness test, the loan closes for an amount that covers the purchase (or refinance) cost of the property, remodeling costs and allowable closing costs. The loan includes a contingency reserve of 10 percent to 20 percent of the remodeling portion of the loan to cover any unplanned extra work.

• While the seller gets paid at closing, the extra repair funds go into an escrow account. As projects are completed, the new homeowner submits draw requests to pay the vendors who did the work. If the borrower chooses to do so, he can also have up to six monthly mortgage payments added to the cost of rehabilitation if the home won’t be occupied for a while. In Broward County Florida, the foreclosures are being released so many at a time. It is possible to stumble upon the house of your dreams at an unbelievable price but needs fixing up. This is the perfect loan!

I personally live in Coral Springs and consider myself a Broward County real estate expert. Allow me to assist you with the purchase of your new home. Thinking of selling your Broward County, FL home? Interested in finding out the current market value of your single-family home, condo or investment property? Give me call today to discuss what is happening in the Broward County real estate market and how I can best serve your real estate needs. I would be happy to give you a personalized comparative market analysis (CMA) and answer all of your questions.

Terri Poehler -Broward County, FL Real Estate Expert – Making it Happen for Home Buyers & Sellers!

Interested in buying a home in Broward, FL? In our inventory, we have a variety of Broward County properties to choose from to fit your individual lifestyle, budget and needs.

Let's talk!
Terri Poehler
RE/MAX Professionals Real Estate
954-294-3937
Terripoehler@ReMax.net

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Dick & Sandy Beals

Wilmington Real Estate 4U Wilmington, NC - Wilmington, NC

Hi Terri,

I agree...they sound easy, and they should be easy, hwever......

Dick Beals

Jun 30, 2012 10:20 AM

Eric Michael

Remerica Integrity, Realtors®, Northville, MI - Livonia, MI

Metro Detroit Real Estate Professional 734.564.1519

Terri, you did a fantastic job of explaining the 203k loan. I just submitted one but it happens to be on a short sale. Wish me luck!

Jun 30, 2012 10:51 AM

Will Hamm

Hamm Homes - Aurora, CO

"Where There's a Will, There's a Way!"

Way to go Terri, People need to know about 203K type deals and you did a great job of letting them know. Suggested

Jun 30, 2012 11:36 AM

Tom Esposito

Alpharetta Home Solutions - Alpharetta, GA

The 203k program is great for investors and first timers. You might also want to speak to your local Lowe's home improvement center. They have a company program to implement the 203k, assisting with inspections and necessary estimates for repair. They have some experience, usually a lot more than a buyer or even a real estate agent.

Jul 01, 2012 01:40 AM

Ron Aguilar

Gateway Mortgage Group - Saint George, UT

Mortgage & Real Estate Advisor since 1995

As a mortgage lender here in Utah, I always suggest using a 203K for those homes that need a facelift.

It amazes me why agents can't seem to promote this to their buyers in the beginning. Of course I will fill in the details going forward. This is a great program with the right understanding.

Jul 01, 2012 02:17 AM

Jon Mahan

Real Estate Central - Charleston, WV

ABR Charleston, West Virginia Real Estate

Terri,

The 203(k) loan is a great option for homes needing repairs. Thanks for bringing it to every ones attention.

Jul 01, 2012 02:38 AM

Roy Kelley

Retired - Gaithersburg, MD

Many home buyers are using FHA 203(k) financing to purchase REO properties. It is one of our favorite loan products in Maryland.

One of the comments mentioned that this is a good loan for investors. I do not think the 203(k) is currently available for real estate investors. It would be great to have that option that was available years ago.

Have an outstanding week.

Jul 01, 2012 02:58 AM

Jana Holmstrup

Jana Holmstrup - CCO - Kings Mortgage Services, Inc. - Visalia, CA

And the Streamlined "Baby K" is super easy - if you're just looking to fix 'ugly'. Up to $35,000!

It may help you get those homes SOLD :)

Jul 01, 2012 03:00 AM

Kimo Jarrett

Cyber Properties - Huntington Beach, CA

Pro Lifestyle Solutions

To secure a 203(k) loan, the property must be owner occupied, doesn't it?

Jul 01, 2012 03:24 AM

Terri Poehler

Realtor - Coral Springs, FL

Coral Springs Real Estate Agent

Dick, I know, but so worth the effort.
Eric, much great luck being sent your way!
Will,Jon and Roy, thanks.

Jul 01, 2012 04:35 AM

Marte Cliff

Marte Cliff Copywriting - Priest River, ID

Your real estate writer

I wonder if they've changed this over the years.I hope so.

We had one couple purchase on a 203(k) years ago and it was a nightmare for them. They were fixer-people and knew how to do the work themselves, but the loan program stated that they had to pay someone else to do it. And of course, paying someone else means spending a LOT more money.

Jul 01, 2012 04:36 AM

Harcourt Bethel - REALTOR®,CDPE,ABR®,SFR,ePro®,TRC,

Orlando, FL

Harcourt Bethel, CDPE,SFR®, ABR®,ePro®, TRC, NCHSE

Terri, great stuff here and the FHA 203k is great for any O/O or investor purchase of fixer-uppers &/or ugly homes.

I work with a great Mortgage Broker that does these programs out of Tampa, he is very knowledgable and he also teaches the FHA lending pratices/guidelines to Realtors, via Seminars.

Jul 01, 2012 07:03 AM

Ron, maybe this will help get the word out.
Jana, anything to get these sold!
Kimo, yes, I believe so . .

Jul 01, 2012 07:49 AM

S W

Centerville, KS

Not enough buyers are taking advantage of this great opportunity to get a home setup the way they want and possibly gain some instant equity.

Jul 01, 2012 11:38 PM

Bob Miller

Keller Williams Cornerstone Realty - Ocala, FL

The Ocala Dream Team

Hi Terri, excellent post on the 203(k) loan. Thanks for sharing. We could use them often here in Marion County as well.

Jul 02, 2012 03:11 AM

Clint Mckie

Desert Sun Home, commercial Inspections - Carlsbad, NM

Desert Sun Home, Comm. Inspection 1-575-706-5586

I had to check out your post on the 203 K loans.

The home in the post looks like it needs a lot of work. LOL

Great info. and keep putting the word out.

Best, Clint McKie

Jul 04, 2012 01:33 AM

FHA 203K Loans

Handy Man Specials

Terri Poehler -Broward County, FL Real Estate Expert – Making it Happen for Home Buyers & Sellers!

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