The FHA 203k is a loan product that provides funds to purchase and to renovate a property all in one low interest loan with a fixed rate for 30 years.
In San Diego the 203k was pretty much non existent for many years due to the cost of homes in the area versus the maximum loan amount for FHA in that area being around $260,000. Well that is old news, the new maximum loan amount for
San Diego county is more like $729,750 which puts us in most neighborhoods.
Here is a purchase for $800,000+ that needed $150,000 in renovation but there was no loan to take the majority of it due to the renovation needed. What the borrower did was put down the difference between $729,750 & $950,000. This way they were able to get a maximum loan of $729,750.
If you sold a home in the past year that needed work, please let your client know that there is an FHA 203k refinance product they can get money to finish those needed repairs. The only limit to the repairs is the maximum loan amount for the county less the existing debt. They might even get the renovation money with no additional money out of the pocket.
You may be doing them a big favor.
What if you have a buyer that bought a home a while back and started renovations just to find out that they bit off more than they could chew.
Those are done time and time again. We are doing one right now that was a purchase for $550,000 and the borrowers started renovating it.
It wasn't too long before they realized they were running out of money to complete their project. We merely do an FHA 203k compliance inspection and create a scope of work that completes the project.
Then bids are taken to complete that "scope of work for the client. Once the bids are in we select a contractor and the loan closes. The work is all completed after it closes escrow.
In the case of a sale, the agent all get a pay day, then the work starts. The 203k consultant in San Diego for this case, would stay with the project doing the draw inspections. These inspections are to see that the work was completed in a professional workmanlike manner. This process continues until the project is complete.
We are proud to announce our newest associate and 203k consultant in San Diego Henry Trulson, a long time home inspector serving the greater San Diego area for a number of years.