Miami FL is ripe for the FHA 203k loan program
Yes, it is. Miami and the Greater Miami area is a really hot bed for the FHA 203k and the HomeStyle renovation. I have always believed that every home you might purchase that isn't brand new is a potential renovation loan.
1) Realtor sells a house that has a roof that is marginal. Sale is finalized and six months later the rains start, the roof leaks, who gets sued? Did you disclose it properly. It it was a 203b someone said it had at least a 2-year life expectancy. Was that you or the appraiser? It doesn't matter you likely will both be sued. Most people don't ask for a copy of their appraisal so it may take a while to locate the appraiser... but You, were their best friend for a while. You they can find very easily.
2) Same house, the roof looks questionable, turn it into a 203k, replace the roof, no one gets sued cause it doesn't leak. Or, it does leak and the contractor gets a call to repair his work. No one gets sued. The contractor's insurance comes into play to fix other damage.
3) How about the brand new carpeting in the home? I always question what they are covering up. Last summer I had a client who purchased a home and had family members who were allergic to carpet so they pulled all that brand new carpet to expose many, many pet stains in the sub floor. She actually had the contractor remove quite a bit of plywood flooring and replace it before she had them install her hardwood flooring.
Unless you put in the carpeting yourself you have no way of knowing what it might be covering up.
What is another good reason to use the FHA 203k loan?
Low down payment
and the biggie - A 10% advantage on the appraisal if you are buying a 1-4 family home and not a condo. This means if your appraisal comes in a little low, not a problem up to 10%. If it appraises at $250,000 and you needed $275,000 less you are still in business, no hiccups here.
I've seen 203b, you know, the standard FHA loan that doesn't require any repairs going through to close when the appraiser finds some issues that must be addressed. You can taken care of up to $5000 in repairs with a repair hold back but that doesn't get the low appraised value taken care of. By making it a limited 203k you can get any minor repairs included, any FHA lender can do the Limited 203k and you get the 10% advantage on the appraised value.
What can your 203k consultant do that most won't? Recommend a lender that can actually close a 203k loan in short order. I hate to see some lenders telling everyone they can do the 203k while in fact they take 60 days to close the loan. There is no reason to take any longer to close a 203k than it does to close a 203b loan.