With inventory low the FHA 203k loan is hotter than ever! Wanted to share with you some of the common misconceptions about the 203k loan. Take a look below and find questions and answers and hopefully this will help you with the purchase or sale of a property.
Can foundation work be rolled into an FHA 203k and a HomeStyle Renovation loan? YES! Got 2 calls about this just yesterday one from a Realtor and one from a buyer. The Realtor was very excited to hear this loan really does exist!! Her seller refused to pay for any foundation work as he deemed it “not bad enough”. So win /win for all involved. The buyer who called had called 3 lenders who told them there were no loans available for homes that had foundation issues so that savvy buyer took to the internet and found us and we dispelled the mystery.
How much work can be rolled into a 203k loan? FHA doesn't actually have a limit as long as the house appraises to be worth the purchase price plus repairs. Probably the least talked about and one of the best features is that FHA’s 203k loan allows for financing up to 110% of the after improved value. YES you heard it correctly! So maybe your client is getting a great deal on a foreclosure that needs deferred maintenance that will work just fine with the ability to go up to 110% of the after improved value.
Are 2 appraisals required? NO! We as your lender only want to see what the after improved value is …..and as long as that is good we are moving onto underwriting! Only one appraisal cost for your buyer.
Finally, the one I like answering the most: Do these loans really close? Yes!! We close them all month long…check out my website for some scenarios we have completed and to see our client and Realtor feedback.