The FHA 203k is alive and well in Charlotte NC

The FHA 203k is alive and well in Charlotte NC

The FHA 203k loan guarantee program is actually alive and well all over the USA but it isn't the only renovation loan out there. If your client has more than 3.5% down payment the Fannie Mae program called HomeStyle® Renovation Mortgage may be a better option. If your client is putting a 20% down payment there is no PMI (Private Mortgage Insurance) which can save them several hundred dollars per month. This could also allow them to purchase more of a house.

I had a lender call me for a "rush job" in Charlotte a while back, then within an hour the same lender called me out for a second "RUSH project". Turns out these both Limited 203k projects with no consultant involved only to find out the day prior to close on both of them that they had issues. No one spotted those issues till ONE day prior to closing. One day before your payday, the client's new house to be theirs and someone finally noticed a large support beam had to be replaced as it was compromised with termite damage... remember that Limited 203k projects cannot have structural issues. Our Charlotte Team was able to get out there and get their report completed so the loan still closed the next day but in the afternoon rather than the morning. 

The other one didn't have such a pleasant ending. Turned out it had a High Tension Tower about 12' away from it and it was clearly in the "Fall Zone" for the tower. FHA doesn't insure loans within the "Fall Zone" of a HT tower. None of the photos showed the property next door, the appraiser wasn't aware of the HUD Guideline apparently, but this was clearly a conventional loan project. This deal was dead as an FHA project. 

What gets me is that 98% of the problem 203k loans are Limited 203k's and if you are a lender that can do both then what is the advantage for failing to use a consultant. These kinds of surprises are better found out early in the process and not when everyone has the expectation of closing the next day. While HUD doesn't require a consultant on a Limited 203k, it may be your best solution to minimize surprises. 

Uptown