“FHA Renovation Loans have Rules”

Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

 “FHA Renovation Loans have Rules”




Mr. Petrowsky,

Your name was given to me by one of my co-workers. I was recently denied for mortgage to complete some renovations to my home. Just some general information. My current first mortgage is about $160,000 and have a second mortgage of $35,000 and have about $30,000 in credit card debt. The bid I have for the renovations is $50,000.

I was attempting to do an FHA 203K loan for $275,000, but even though my income is sufficient, I was denied and truly was not given a good reason.



Unfortunately, the loan officer should have known that you can’t pay off credit card debt as part of a renovation loan. If the goal was to accomplish the renovations and pay off credit debt, this can’t be done as part of the same loan.


The solution would be to pay off the first and second mortgages and do the renovations. Once the renovations are complete, there would be an opportunity to refinance, eliminate mortgage insurance and pay off the credit card obligations.


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, Joe Petrowsky there's a reasonable order for everything....some people have no common sense....

Apr 17, 2020 03:18 AM #1
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Joe. The road to success is easy if you ask the right person for directions. Enjoy your day!

Apr 17, 2020 05:30 AM #2
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Joe Petrowsky

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