What is going on with the FHA 203k in San Jose?

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

San Jose like any other city in the USA has this understated loan program going on called the FHA 203k loan guarantee program where you get the money to purchase or refinance your home and money to fix up all in one low interest loan. The loan program has been around since 1961 but most people would quiz will tell you that it's new maybe since 2005.

well in 2005 the streamlined K was born. this is like 203K on a diet some people call at 203K light. More letters are capable of doing the streamlined 203K that are the full or standard 203K. That presents a problem in its own. As these lenders tout the product they also misinform the community by saying there is a limit to 203K of $35,000. That is shameful. There is no limit for a 203K other than the County limit less the purchase price. In many counties the FHA maximum mortgage amount is $729,750. Therefore if you purchase for $250,000 you have $529,750 to play with for construction and that's a far cry from $35,000.

Let's analyze the $35,000 comment. Was it ever $35,000, no, it never was. In reality the guideline says $35,000 keep reading it also says including costs and fees. Those costs and fees are typically about $800. Therefore a contractor would have to have a maximum construction cost of $34,200. Otherwise this loan becomes a full 203K loan. now the kicker, if your lender requires a 10% contingency reserve then you can take 10% off of the $34,200 now it's only $30,780, what if your lender requires a 20% contingency reserve, that which your maximum loan at $27,702 for construction costs. Therefore you see how important it is that you know what your lender requires a contingency reserve. Failing to do this will cause your streamlined 203K to be a full or standard 203K.

203k project Mountain View    203k Mountain View after photo

203k mountain view project

203k Mountain View project Mike Young team It is amazing what you can do these days with a kitchen. This kitchen was one of the most beautiful kitchen remodels we have seen in recent years.


The key to a good renovation project is to start with a great 203k lender who has actually clsoed one, better yet one who closes hundreds per year like Ed Rogers or Tom Huntley.

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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.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

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