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Why Are 203k Loans So Terrible?

 
broken clock by stiina resized 600

4 FHA 203k Myths Busted

"Wait, the government?! Oh no! They take forever to do things! It's like time's standing still"Paperwork. Time. Bids. Big loan. These are all things we hear that are keeping people from taking advantage of the FHA 203k loan for home improvements, renovations and repairs. They also keep real estate agents from suggesting this option to clients. From structural to desired improvements like carpet and paint, this government backed program can roll the cost of work into the life of the mortgage.

Well, it’s true. Sometimes it takes our government takes awhile to get through the red tape. And yes, some 203k loans we’ve heard of have taken "forever." But here’s the secret: We’re closing loans in 30-45 days (just like any other loan). Let’s put 4 myths of the 203k to rest right now.

  1. Paperwork. Yes, there is a little more work involved in a 203k loan. The good news is that we’re experts on the loan, and we know the steps it takes, so we’re efficient at getting whatever paperwork is necessary together all at once. This way you’re not waiting around for your application process to unfold. Our team has completed comprehensive training so everyone understands what HUD wants from the borrower. We can walk you through it.
  2. Time. We’ve heard the horror stories of 203k loans taking forever to close. Time frames including 60 days, 90 days or more have been tossed around. (Read: Don't Wait 90 Days for Your Mortgage Loan to Close) There could be several reasons for this to happen. The bank handling the loan may not understand the difference between a full 203k and a streamline 203k mortgage (the basic difference is that a full takes care of structural stuff, the streamline is more for smaller repairs and upgrades). A lot of loans get hung up in the bid process. When looking for a lender, look for one with a network of qualified contractors who have done this work before. In short, the loan should not take significantly longer than any other loan to close.
  3. Bids. Some people are natural negotiators. I’m not one of them. So dealing with getting bids and finding the most appropriate one for the work doesn’t sound like a good time. Lots of people are the same way. We’re working with REbuildUSA and Lowe’s to help make the bid process user-friendly. Our relationship with Lowe’s means we’re already hooked up with certified contractors ready to give you reasonable bids. They want to get the work done so they can stay in the system.
  4. Big Loan. "Buying a house and borrowing more money for repairs goes against the advice of financial planners. I don’t want to pay for the carpet for 30 years." Here’s the great part about the 203k: you can borrow money based on the future value of that home when the repairs are done. So you’re amortizing the cost of the repairs and upgrades into the investment. This means you’re getting instant equity. If you buy a home for $60,000 that’s in the neighborhood of $100,000 homes, and put $20,000 worth of work into it, you’re now the owner of a more valuable home that you paid $80,000 to buy. You have $20,000 instant equity.

Whether it’s finding a great deal on a foreclosure, or working to improve your own home with a refinance, rolling the cost of the repairs and upgrades into the life of the home mortgage loan can really help add value to the house.

The takeaway:

Make sure you find a 203k specialist to help with this process. You want someone who's done these loans, who knows the government requirements and who knows certified contractors to get the work done.

get-the-free-fha-203k-survival-guide  

(photo: ..stiina..)

Comments

i like to talk with your executive as i am in a consstruction field and working as a builder and contractor
Posted @ Tuesday, August 02, 2011 10:22 PM by joney
DO NOT use Wells Fargo for your 203K. Use a smaller company, like possibly the one on this website. 
 
 
 
I went with WF, because I didn't know any better, and closing on the loan turned out to be one traumatic experience. It took 6 months to close, and I had to beg the sellers not to back out. I came to the brink of disaster many times after having nearly $8k and months invested. The recurring problem was WF kept asking me to resubmit the same paperwork 2 to 6 times over, because they kept losing it. They even have the nerve to blame the customer about the lost paperwork. Be sure to keep your emails of sent items and scanned documents to prove to them when they start this line of excuses with you. 
 
 
 
Wells Fargo doesn't care about individuals. 203K loans are okay, as long as you use a smaller company that actually cares about their work.
Posted @ Saturday, August 13, 2011 5:15 PM by Rene
Thanks so much for the kind words. We care deeply about our clients and their loans. The FHA 203k can take a lot of work, but we believe in it!
Posted @ Saturday, August 13, 2011 6:27 PM by Dan Moyle
First of all appreciate your share, like your blog, the hope can share with you more wonderful blog,welcome to Canada GooseParka, Canada Goose Coats and Canada Goose UK.
Posted @ Saturday, October 08, 2011 3:17 AM by Canada Goose Parka
I bought a duplex using FHA, we wanted to do some improvements and we applied for 203k the inspector came and said there are several Items that are not up to code and need to be fixed first before we can do our original plans how come before we bought the house FHA didn't point out those items,is there any other loan besides 203K that can be use for repairs.? there are soemthings like painting after the new drywall gets installed that we can do ourselves but 203k doesn't allow the owners to do any repairs.
Posted @ Wednesday, April 18, 2012 11:34 PM by Cynthia
Well, as a 203k Specialist for 18 years, I'm not sure if you had a home inspection or not, and I don't think it's an appraiser's job to tell you if you have code violations....but once you get into a 203k loan, it then becomes the HUD consultant's job to inform you of ANY deficiencies per HUD's Minimum Property Standards and/or code viloations. At Amerifirst, we allow borrowers to paint with either the Streamline Loan or the Full 203k as long as they provide and borrow the amount for the full cost of the labor and materials for the paiting job. In the end, the labor dollars you saved would be applied to the principal balance of your mortgage. Therefore increasing your equity position in your renovated home.
Posted @ Thursday, April 19, 2012 9:05 AM by Joe Daly
Great question Cynthia. Thanks for the detailed response Joe. Keep the questions coming folks - we're happy to answer them all!
Posted @ Thursday, April 19, 2012 1:14 PM by Dan Moyle
I understand that its a 2 year wait after bankruptcy for a 203k loan, minimum. Is there anyway around it? With explanation? Or any other programs like this available with a good job history and downpayment Thanks!
Posted @ Saturday, August 25, 2012 7:37 AM by Robyn
Robyn, 
Generally this is a standard set up by FHA. I do not believe there is much wiggle room in this requirement. However, a mortgage consultant may have a better answer or another alternative. You cansee if there's an AmeriFirst branch near you at our office locator page: http://www.amerifirst.com/index.php/our-team/office-locator.html 
Thanks for the question! 
Dan Moyle
Posted @ Tuesday, September 11, 2012 11:57 AM by Dan Moyle
Is it possible to use an FHA 203k loan to ONLY finance those renovations which you don't plan on doing yourself? For example, I know I have no desire or ability to put in replacements windows or reroof a house. But I have experience with tiling and feel pretty confident I could handle a bathroom remodel. Would it be possible to finance the windows/roof, but pay for the bathroom myself? Or would the house be unable to close with an unfinished bathroom?
Posted @ Monday, November 05, 2012 7:38 AM by cabercro
Yes! You can finance needed repairs (to pass an FHA inspection) or desired repairs done by a professional. If there are DIY home improvements you want to tackle, simply don't roll them into the bids for the work with the FHA 203k. Great question - thanks! 
 
Dan Moyle 
AmeriFirst Home Mortgage/Marketing
Posted @ Monday, November 05, 2012 7:39 AM by Dan Moyle
Hello, 
It seems you guys can help me see if my plans are doable. We would like to build a semi-finished house (with a builder) and finished it by ourselves. Can we do it with FHA 203k or 203k streamlined loan? What need to be the condition of the semi-finished house to get the loan to finish it? Thanks!
Posted @ Friday, November 16, 2012 7:46 AM by Olga
Olga, 
The house needs to have a certificate of occupancy (typically from the local housing board). The 203k is not for finishing new construction, it's meant for renovating. So if you have a COA then you're good. 
 
If the home is loactoed in one of our 10 states where AmerFirst is licensed, let us know and we can see if the home is 203k-eligible. 
 
Great question, thanks for asking! 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Friday, November 16, 2012 8:02 AM by Dan Moyle
Is it possible to get a MSHDA grant for first time home buyers in addition to the FHA 203K??
Posted @ Sunday, December 16, 2012 8:03 PM by Carrie
Carrie, 
While it's a possibility that the MSDHA grant may be used on a 203k loan, it's on a strict case by case basis. You would need to talk to a mortgage consultant about your specific situation, credit score and cash reserves. 
Great question - thanks for asking. 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Monday, December 17, 2012 11:48 AM by Dan Moyle
we have considered purchasing a home that neeeds extensive repairs. the current value is very low due to structural (roof and some wall) damage and mold...for which we would need to contract. most all of the lighter jobs Mostly costmetic) we can and would want to do...My question is: is there a ratio o be met based upon current value/reno expense/completed value? example: purchase 100 + 200 for reno= completed? we could do purchase ourselves, but then the reno would be extensive and we wuld need funds for that. thanks for Ur help 
Posted @ Monday, December 17, 2012 11:10 PM by Tina
Tina, 
There isn't a magic ratio number to be met, but you would need to have a home inspector (or better yet a HUD/203k consultant) help you determine what's finished. Your best bet would be to talk details with a lender familiar with the 203k - a specific mortgage consultant. You can always fill out our contact form for that <a>http://www.amerifirst.com/index.php/contact-us.html or email me and I can help find someone. dmoyle@amerifirst.com 
 
Cheers, 
Dan Moyle 
AmeriFirst Marketing
Posted @ Thursday, December 27, 2012 9:20 AM by Dan Moyle
We're interested in a property and using a 203K, and I'm trying to get a firmer handle on the allowable mix of 203k renovations and jobs we handle ourselves outside of the 203k funds. I see that patios are allowed, but outdoor kitchens seem not to be - would it be possible to roll the underlying patio into the 203K and then pay ourselves for the outdoor kitchent that goes on top of it and do it all at once? or would we need to have that patio job inspected and finalized first, before adding the outdoor kitchen on top of it? Also, there is a garage sitting way back at the end of the property that we'd ideally like to move forward closer to in line with the house to create more of an open back yard - I can't find any prohibitions against something like that in the 203K materials I've seen, but also haven't seen it stated as explicitly allowed? And finally, I have a relative who is a contractor with decades of experience, but who lives in Canada. Does 203K rule out any out of state/out of country contractors? thanks for any advice.
Posted @ Thursday, December 27, 2012 10:12 AM by mac
Mac, 
All great questions. Many of them would be best answered by a specific lender & mortgage consultant. But here's the basics: 
The outdoor kitchen is not allowed, so you would have to pay for it another way, but the patio could be covered yes. The kitchen would have to come after the work is inspected. Moving a garage may be covered, depending on surrounding comparables and the lender. The same goes for the contractor. The lender may require certain things like insurance and licenses in the U.S. for a Canadian contractor, or the lender may say no. You'd be better off talking with a mortgage consultant over the phone or in person, but it sounds like some of the projects would be at least mostly covered with the 203k. 
If you'd like to talk to someone specifically about the 203k, click here: <a>http://blog.amerifirst.com/from-repairs-to-rahab-a-203k-loan-may-be-your-answer 
 
Cheers, 
Dan Moyle 
AmeriFirst Marketing
Posted @ Thursday, December 27, 2012 10:18 AM by Dan Moyle
203k has done nothing but slowed up our closing process and threatened to invalidate it. Our mortgage has been brokered because lenders don't want to deal with it. Every condition on list had to do with the 203k. Without it, would would have been closed in November. Now it is January. Get a Lowes card at a higher interest and after you get into your house. Never again.
Posted @ Wednesday, January 16, 2013 10:20 PM by Aaron
Aaron, 
I'm sorry to hear you had a bad experience with the 203k loan. they do take a bit longer, but that sounds like it's too long. Is it an AmeriFirst branch you're working with? Our renovation loans take an average of less than 50 days to close. It shouldn't be as bad as what it sounds like here. With an expert team (lender, contractor, prepared borrower, real estate agent and 203k consultant), the process should run more smoothly.  
 
Dan Moyle, AmeriFirst marketing
Posted @ Thursday, January 17, 2013 10:00 AM by Dan Moyle
Is it possible to use a 203k loan to purchase a 3 story home and convert it 2 unit home, each unit sharing the middle floor? I live in DC and currently rent a 1 bedroom apartment, I could find a row house fixer upper and convert. What do you think?
Posted @ Monday, February 18, 2013 8:38 AM by Ron
Ron, 
In theory this sounds like it would work, as long as you're living there.FHA requires the owner live in the home - not for investors. As AmeriFirst isn't in DC, you may want to talk to a local lender with 203k experience. Great question! 
Cheers, 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Monday, February 18, 2013 9:26 AM by Dan Moyle
Couple questions about the 203k.  
 
I refinanced recently (~6 months ago). I understand I cannot use the 203k program to purchase and remodel a new house until 12 months after refinancing my current house. Question is, if I buy a house now outside of 203k and in 6 months it has been more than 12 since my refinance, does that mean I can use the 203k for the new house? I understand houses are eligible for 203k up to 6 months after purchase. If this is true, what would need to be submitted, completed, approved in that window before 6 months after purchase? Does this make sense? Let me know if you need more details or if I can try to explain it better...
Posted @ Monday, February 25, 2013 11:48 PM by Jonathan
I have some questions regarding a 203k loan. My husband and I are looking to purchase a fixer upper and possibly use a 203k loan to tie in the fixing up process. What is necessary for the property to pass the HUD inspection? This house needs plumbing and has no kitchen. Would these need to be fixed prior to qualifying for a 203k loan?
Posted @ Saturday, March 02, 2013 6:44 PM by Susan
Susan, 
The great thing about the 203k loan is that you can close on the mortgage before that work is completed. The work then gets done before you move in, and a final inspection is done. The FHA 203k let's you buy a house like this one and roll the cost of the work right into the mortgage. You can fill out a contact form here on our site to get in touch with a 203k specialist, or email me at dmoyle@amerifirst.com and I'll put you in touch with someone. 
 
Great question Susan..thanks for reading! 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Saturday, March 02, 2013 7:46 PM by Dan Moyle
My husband and I are looking into buy a home listed at $50,000. The property needs a new roof, and the inside will need many cosmetic fixes (kitchen, bathrooms, bedrooms, carpet, tile, doors, windows etc). There is a leak from the roof going down to both bathrooms. We have asked the seller to fix the roof before we close but haven't heard back yet. With the roof being fixed by the seller we have estimated about $17,000 in work to be done. If an inspection is done before all of the work, it will come back with many problems. How would a 203k loan work with this situation?
Posted @ Tuesday, March 26, 2013 4:06 PM by Jen
Jen, 
The FHA 203k would allow you to finance this home and roll the cost of those renovations into the mortgage, allowing you to close on the home before the work is done. Then you'd pay for the work before moving in, and you'd only have one payment. The cosmetic fixes would most likely be covered, as would the roof work if the seller didn't cover it. If you're in one of the states where AmeriFirst is licensed, I'd be happy to put you in touch with a mortgage consultant to see if the 203k loan would work in your case. 
Cheers, 
Dan Moyle 
dmoyle@amerifirst.com 
<a>http://www.amerifirst.com/our-team/office-locator.html
Posted @ Wednesday, March 27, 2013 8:58 AM by Dan Moyle
They are good for those who need it, but I tried a 203k loan on one house I tried to buy back in 2010. It was a nightmare. I used Wells Fargo and never again. The process was delayed continuously and went on for 9 months; from January to September! I kept getting the run-around. Then the owners were trying to sell it out from under me while still under contract. I ended the contract shortly after Labor Day because I was so disgusted. I later found and bought my current house with a standard FHA loan, it was move-in ready, and went with another mortgage company. It went so much easier. Although, I had a first bad experience, I have my eyes on a house now to be a new home that requires a 203k and may try again. Hopefully I won't have such a hard time this time.
Posted @ Wednesday, March 27, 2013 3:48 PM by Michelle
Michelle, 
The key is to have an expert team including an experienced mortgage lender. Here are a couple of articles we've published that talk about that, and why a community lender like AmeriFirst might just be perfect for you. 
<a>http://blog.amerifirst.com/amerifirst-blog/bid/93502/Don-t-Wait-90-Days-for-Your-Mortgage-Loan-to-Close 
<a>http://blog.amerifirst.com/amerifirst-news-room/bid/71516/AmeriFirst-Ranks-Among-Top-FHA-203k-Lenders-in-America 
A 203k loan shouldn't take that long, provided everyone involved is moving at a reasonable speed. Let us know if you have any questions. 
Cheers, 
Dan Moyle 
AmeriFirst Home Mortgage (media & marketing)
Posted @ Wednesday, March 27, 2013 4:10 PM by Dan Moyle
I just refinanced my house with Citibank and didn't really know about the 203k loan at the time. Can I still apply for the loan without refinancing again?  
 
Posted @ Tuesday, April 02, 2013 1:01 PM by Cynthia
Hi Cynthia, 
You will have to refinance, as the 203k loan is a full mortgage. If you'd like to apply or talk to a mortgage consultant in your area let us know! 
<a>https://www.applyatamerifirst.com/application.asp
Posted @ Thursday, April 04, 2013 9:24 AM by Dan Moyle
My husband and I are looking to buy our first home. The purchase price is 105,000. The house needs a new kitchen and we like to add a 3rd bedroom to support our family and also for resell benefits when the time comes to resell. I understand that the purchase price as well as the rehabilitation cost are rolled into one loan but I'm confused on how the disbursement of money for the remodel works. Scenario: The purchase price is 105,000 and say the rehab costs and all the fees/contingency costs add up to 30,000. The 105,000 is paid to the seller and the 30,000 goes into an escrow account. Do we (homeowners) have to pay for the construction/remodel upfront and then be reimbursed from the escrow account once the work is completed and inspected? Or is money from the escrow account disbursed a little at a time...??? We simply wouldn't have the extra cash after paying closing costs, downpayment, etc... to be out of pocket for construction/remodel costs. Please explain! Thanks so much!
Posted @ Sunday, April 07, 2013 10:56 AM by Magen
Magen, 
The loan amount covers the construction, so you're not out any money from your own pocket. The funds are disbursed from an escrow type account yes, but one that is funded by the mortgage, not by your own checking account. If you have further questions please let us know via email or calling a branch near you. <a>http://www.amerifirst.com/our-team/office-locator.html 
Great question, and I hope I helped! 
Dan Moyle 
AmeriFirst Home Mortgage media & marketing
Posted @ Monday, April 08, 2013 7:58 AM by Dan Moyle
Do not use Wells Fargo or a 203k through Wells Fargo. I repeat, do not use Wells Fargo. These people couldn't chew gum and tie their shoes laces at the same time. If you use a 203K loan to remodel, your contractor bid will not satisfy the HUD consultant that deternmines what has to be fixed. This HUD consultant was so bad, that my contractor declined the work because he would not charge what the HUD consultant claimed the repairs wold cost. I convencied him to reconsider and we worked it out ourselves, but lets say the bid was for 10,000 for flooring to include carpet, laminate and tile but the HUD consultant would not agree with the bid and increasing the cost per their expertise to 15000 and forced me to borrow more money. It cost exactly 10,000, not 15000 but I had to borrow the extra 5000. thats one example of the contract bid. In other words for the entire contract, HUD increased my borrowed amount by $20,000 and I never used a penny more then the origional bid. If you don't use the funds then it goes back on the principle, however, I cannot restructure the loan to reflect the $20,000 and I am still makng a payment n the origional amount borowed. Some may say, well, just walk away, but, i was on month 4 and counting and needed a place to live with my large family. Just beware that no mater how much you try to save the HUD consultant will add to it. Maybe I had a bad experience or HUD consultant, but I dough it.  
I am sure the 203K can work for lot of people, but if your a do it yourselfer don't expect HUD to let you do anything unless your a certified contractor. gain beware.
Posted @ Wednesday, April 17, 2013 5:09 PM by Phil
Phil, 
I'm very sorry to hear you had a bad experience. I can't speak to where the problem started (lender, consultant, whatever) but I can tell you that this situation doesn't sound like anything that would happen at AmeriFirst Home Mortgage. We don't want you borrowing more money than you need! Thanks for sharing your story. It's a good cautionary tale for people to be aware of when considering a 203k loan.
Posted @ Thursday, April 18, 2013 7:09 AM by Dan Moyle
I have been told that I will need to pay insurance on this loan. Will I need to pay insurance for the full life of the loan or is it just until repairs are complete? Further, if I do have to pay insurance on this loan for the full life and decide that I do not wish to can I switch back to a regular loan at a future date 
Sincerely Paul from Long Island
Posted @ Tuesday, April 30, 2013 9:17 PM by Paul
Paul, 
Let me first say that AmeriFirst Home Mortgage is not licensed in New York, so anything we share you'll need to confirm with a local mortgage lender.  
Yes, because the 203k loan is through FHA, it comes with mortgage insurance premiums. You can typically phase these out once the home has 20% equity over the appraised value. It's not based on when the work is done, but the value of the home.  
You can refinance into a conventional mortgage once you have the necessary down payment, yes. 
I hope that helps. Have a terrific day, and thanks for reading! 
Cheers - Dan Moyle / AmeriFirst media & marketing
Posted @ Wednesday, May 01, 2013 7:13 AM by Dan Moyle
A point to clarify on FHA mortgage insurance: "Starting April 9th of this year. Mortgage Insurance is required for the LIFE of the loan on FHA loan. So even if a buyer would pay it down or get a new appraisal to show 20% equity in their property it would not get rid on the monthly mortgage insurance payment. Borrowers would HAVE to refinance conventionally to get rid of mortgage insurance."
Posted @ Wednesday, May 01, 2013 8:21 AM by Dan Moyle
Dan - Can you please expand on your last comment for FHA insurance premiums? 
=> Borrowers would HAVE to refinance conventionally to get rid of mortgage insurance. 

Earlier you had suggested the same, "You can refinance into a conventional mortgage once you have the necessary down payment, yes. " 
 
What does it mean by Refinance conventionally? if the rates are same, will it cost any different than refinancing?
Posted @ Saturday, May 04, 2013 1:59 AM by Nitin Khosla
Paul, 
An FHA loan is a government-backed mortgage, as you buy mortgage insurance through FHA. A conventional mortgage is not insured through FHA, so it's "conventional." Usually (but not always) this requires 10% down or more, often 20%. 
 
So while I mentioned it in an earlier comment, I needed to be sure I clarified. Hope this helps. As always, if you have further questions I'd suggest talking to a licensed loan officer. Thanks!
Posted @ Monday, May 06, 2013 2:06 PM by Dan Moyle
I bought a house in 2010 with an FHA loan. I want to add another room and do other renovations. Is a FHA 203k loan a possibility? If so, would the loan be only for the renovations cost or can it be part of a refinance for my existing mortgage?
Posted @ Tuesday, May 14, 2013 2:05 PM by John
Hi John - it is possible to refinance and remodel with the FHA 203k, yes. You'd want to talk to a mortgage consultant about your particular case, but it is possible.  
The refinance would cover the previous mortgage and the renovations together, in one new mortgage. 
Hope this helps. As always, if you want to talk to a 203k mortgage expert, let us know. 
Cheers, 
Dan Moyle 
AmeriFirst Home Mortgage media & marketing
Posted @ Thursday, May 16, 2013 6:54 AM by Dan Moyle
Hello! My current house is under FHA and was just recently refinanced by Quickenloans about 4 months ago still under FHA loan. My question is, can I still use 203k loan? I believe this is the right loan for me however I did not know about 203k but just recently as we are trying to add a space which involves structural renovations. We already consulted a contractor and they said it will cost as about 30k to do this. I already talked to QL about this but they will not refinance again and advised me to wait for a couple of years to improve our equity. Problem is we need to add space as we are a growing family.
Posted @ Sunday, May 26, 2013 12:39 AM by Carmela
After you close on a home, how long does it take for a contractor to receive the first draw? With 203 streamline?
Posted @ Monday, May 27, 2013 10:06 PM by Heather Guajardo
Heather, 
There are only two draws allowed on a Streamline 203k. Most lenders, including AmeriFirst, release up to 50% of the borrower’s renovation dollar amount – usually between 7-14 days after closing. Most lenders, distribute these funds via a two-party check (to the borrower and contractor) mailed or overnighted to the borrower. From there, it’s up to the borrower to contact the contractor to begin disbursing or managing the funds for the purchase of materials and the commencement of work, repairs and renovation.  
Thanks for the great question! 
Cheers, 
Dan Moyle 
AmeriFirst Home Mortgage media & marketing
Posted @ Tuesday, May 28, 2013 6:47 AM by Dan Moyle
Carmela, 
It is possible to refinance, but you’ll have to pay for another set of closing costs along with the monies you’ll need to renovate or rehab. There is not a pre-payment penalty of FHA loans but it’s unfortunate that your loan officer didn’t inform you that you had an option of refinancing and renovating their current home with the 203k. 
If you'd like to talk to one of our consultants about your situation to see if it's a possibility, I'd be happy to put you in touch with someone. Click my email below and we can help. 
Dan Moyle 
AmeriFirst Home Mortgage media & marketing
Posted @ Tuesday, May 28, 2013 7:23 AM by Dan Moyle
Can you get a 203k loan with no money down?
Posted @ Monday, June 17, 2013 10:55 PM by Cyndi
Hi Cyndi, 
Since the 203k loan is an FHA option, it comes with the same 3.5% down payment requirement. So no, there isn't a no-down-payment option for 203k. However, gifts can be used or you may have another option if you talk to a mortgage consultant. Sometimes other loan options come with construction escrow funds to help pay for some light remodeling.
Posted @ Tuesday, June 18, 2013 6:49 AM by Dan Moyle
I am interested in getting a 203k loan to build a good sized deck behind a house we made an offer on. Most likely we would be closing towards the end of November, or December, or possibly even January. How soon does work need be started/completed after closing? I don't know if we would have to wait until spring to start/finish construction? Has anyone ever had his problem before?
Posted @ Wednesday, September 04, 2013 11:15 AM by Dan
Dan, 
Work needs to be completed within 6 months after your closing. So yes, it could be possible to do what you're looking to accomplish. Hopefully you have a lender familiar with the FHA 203k to help you make this happen! 
 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Wednesday, September 04, 2013 11:18 AM by Dan Moyle
Thanks for the quick resonse Dan! So there is not q requirement for work to begin within a set amount of time? We could concievably close in early December and not start he construction until April ? As long as the work is done within 6 months?
Posted @ Wednesday, September 04, 2013 11:23 AM by Dan
That's correct. The work needs to be wrapped up within 6 months, so it's possible to do what you're hoping. Some factors might come into play, but you should be okay moving forward. As always it's important to speak with your mortgage consultant about you particular situation, so any outlying factors can be taken into consideration. Best of luck to you! 
 
Dan
Posted @ Wednesday, September 04, 2013 11:27 AM by Dan Moyle
Can I use a 203K loan to purchase a house that is in my stepdad's name?
Posted @ Saturday, September 21, 2013 4:42 AM by Rid
It's possible, depending on your situation. You can email me to let me know your details and I can see if we can help!  
Dan Moyle 
dmoyle@amerifirst.com 
Posted @ Saturday, September 21, 2013 8:04 AM by Dan Moyle
I am about to bid on a duplex in Washington DC. One unit is currently being rented which helps but this also makes it complicated because I can't renovate her place yet. My question is - if I use a 203k loan, do I have to renovate both units or can I be selective and only renovate the unit I will move into as long as the costs are justified through the appraisal process.
Posted @ Monday, September 23, 2013 1:40 PM by Ron
Ron, 
When using an FHA 203k on a duplex, you have the choice on what you renovate, unless it's a health & safety issue. Anything that would cause the home to fail an FHA inspection would need to be fixed, and could be financed into a 203k loan.
Posted @ Monday, September 23, 2013 1:57 PM by Dan Moyle
Hi Dan, 
 
My husband and I live in and own a duplex. We rent out the other side. We are interested in buying a fixer-upper thru 203k and moving there once renovations are complete. We would then rent out the side of the duplex we currently live in. My question is: 
 
Would a 203k lender count our potential rental income when determining how much house/loan we can afford (though we'll have no history of income from the side we live in)? 
 
Thanks for any advice. 
 
Posted @ Saturday, October 26, 2013 8:52 PM by Amy
Amy, 
Renovation Program Manager Joe Daly says: "Based on FHA's underwriting guidelines for using rental income, borrowers must show the net rental income by providing the last two years of federal tax returns. The amount of net rental income, less a vacancy factor is added to the borrowers income to qualify for a new mortgage.  
 
Since you haven’t had the unit that you’re living in rental before, you could not use any of the potential rental income even if you had a signed lease." 
 
I hope this helps. Please let us know if we can help further. 
 
Dan Moyle 
AmeriFirst marketing/media
Posted @ Monday, October 28, 2013 8:23 AM by Dan Moyle
Thanks, Dan. 
 
One more question: 
 
Is a 203k something that only first-time homebuyers can use? 
 
Thanks again!
Posted @ Monday, October 28, 2013 11:19 AM by Amy
Great question Amy. No, FHA 203k isn't only for first time home buyers. It is however (at this time) only for owner-occupants. It can be used on a duplex as you're considering (up to 4 units in fact), but you have to live in the home as you've indicated you do. 
 
Thanks for the great questions! 
Dan
Posted @ Monday, October 28, 2013 11:22 AM by Dan Moyle
When qualifying for a FHA 203k, is the qualification based on the purchase price plus renovations or the purchase price only? i.e. $150k home with $20k renovations needed. Total loan is $170k. Value after work completed would be about $200k.
Posted @ Monday, October 28, 2013 1:23 PM by Alison
Alison, 
Purchase plus renovations, yes. Also known as "total acquisition price." In your example, the value is of course dependent on the market and your appraisal, but yeas that's a good example. 
Posted @ Monday, October 28, 2013 1:41 PM by Dan Moyle
Is there a time frame on how long I have to own a HUD home that goes through the HUD 203K loan program? Or can I list the house for sale "shortly" after the work is completed?
Posted @ Wednesday, December 04, 2013 6:50 PM by Cory Gilersleeve
Cory, 
As long as the home is your primary residence, it should be fine to use the 203k loan and list it for sale once the work is completed. The main sticking point is that it needs to be an owner occupied home. Hope this helps. 
Dan Moyle 
AmeriFirst Home Mortgage media & marketing
Posted @ Wednesday, December 04, 2013 7:23 PM by Dan Moyle
Hi. I'm interested in an approved Homepath Renovation property. My question is, there is work to be done before we could move in. I see the agreement says it would need to be a primary residence after 60 days of closing, or there is a $10,000 fine. My fear is the work would not be done in that time frame. I like the idea of living in my current home until the work is almost complete, then move in and sell my current. Both mortgages are fairly inexpensive, so other than the double mortgage for a period of time, is this ok? If the work took 4 mos before we move in, will we be fined? Thanks!
Posted @ Thursday, December 12, 2013 3:59 PM by Jennifer
Great question. It’s no secret that Fannie Mae is the seller and you are interested in a renovation program that is there’s as well. Fannie Mae knows the property has repairs or upgrades that must take place in order for it to pass a Fannie Mae appraisal inspection. Therefore, they are offering the HomePath Renovation loan for you to take care of them but allowing you to finance those repairs into your new mortgage loan. As long as you have the full intent to 1. Occupy the property as your primary residence and 2. manage the renovations so they are done as quickly as possible. We’ve never seen Fannie Mae monitor a project as to pose a fee for none compliance based on the timing of the repairs. At AmeriFirst, we would require that ALL repairs are completed and the renovation escrow account be closed out within 6 months.  
 
As for most buyers, I’m sure you are very excited to move into not only your new home, but your newly renovation home just as soon as your repairs are completed that make your home safe, secure and habitual.  
Posted @ Friday, December 13, 2013 8:39 AM by Joe Daly
Hi Dan, 
When interviewing contractors, do you need to inform them that you are going to be using a 203k streamline for the renovations or is this something that can be told after the fact. I've done some work with a contractor before and I didn't pay them until the project was over and I dont see why people are having a hard time with these 203k loans. Why are contractors afraid of getting involved with streamline loans, they get 50% of the money up front?? If you have any insight on that for me it would be greatly appreciated.
Posted @ Thursday, December 19, 2013 1:07 PM by Robert
Robert, 
You're right - it's amazing that more contractors aren't jumping on the bandwagon! They get a 50% draw upfront, then the payment in full when work is done and inspected (on a streamline 203k). Seems better than a client where you're not sure where the money is coming from! 
 
The issue here that we've found is education. People simply don't know about the 203k loan option. You certainly aren't required to tell them ahead of time, but as the loan goes through AmeriFirst will need to check references so they'll know what it is eventually. It's probably better to explain it up-front. 
 
Thanks for the comment. We appreciate you reading! 
 
Cheers, 
Dan Moyle 
AmeriFirst Home Mortgage
Posted @ Friday, December 20, 2013 12:45 PM by Dan Moyle
Fha203k loan. How long do you have to own it or live in it before you can sell it? 
Posted @ Tuesday, December 31, 2013 5:06 PM by kim
There isn't an amount of time required. It must be your primary residence. Other than that you're welcome to sell after the work is complete.
Posted @ Tuesday, December 31, 2013 5:14 PM by Dan Moyle
Can you get fha203k loan and then rent the house? 
Posted @ Tuesday, December 31, 2013 5:24 PM by kim
Only if it's a duplex (up to a four unit house) and you live in one of the units.
Posted @ Tuesday, December 31, 2013 5:26 PM by Dan Moyle
Can yu do the work yourself?
Posted @ Tuesday, December 31, 2013 5:29 PM by kim
DIY work is extremely limited so it's basically no. The FHA 203k finances the work of a licensed contractor.
Posted @ Tuesday, December 31, 2013 5:37 PM by Dan Moyle
I am looking at a home that needs structural repairs and non-structural repairs. If I use a 203K loan, what would be the process for drawing funds from the escrow repair amount? Would the repairs need to pass inspection before the contractor can be paid?
Posted @ Thursday, January 16, 2014 4:46 PM by Emma
Emma, 
Great question. Due to the fact that you have structural repairs, you’ll have a full or standard 203k loan. This means you’ll have a professional contractor handle all of the work, and a HUD consultant oversee the inspections and draws. With the full 203k loan, draws are paid out when work is completed and inspected. When you sit down at the closing table (before the work is done), you and your contractor will have an agreed number of draws to pay for the work. As work is finished, your local HUD consultant (also called a 203k consultant) will inspect it to ensure it’s completed, then will okay the draws. We hope this helps.  
Dan Moyle 
AmeriFirst | marketing
Posted @ Friday, January 17, 2014 9:01 AM by Dan Moyle
Hi. I'm interested in an approved Homepath Renovation property
Posted @ Saturday, January 18, 2014 12:00 AM by mortgages
Hi. You can apply at the top of the page where it says "apply for a mortgage" or go to "contact us" and let us know what you need. Thanks!
Posted @ Saturday, January 18, 2014 8:20 AM by Dan Moyle
there is a lot of paperwork & time needed for this type of loan...I have no problem with it...buying a house takes time just as anything good...be patient & get ur paperwork straight & it will all work out! :)
Posted @ Tuesday, January 28, 2014 11:28 AM by Theresa
Are you licensed in LA?
Posted @ Thursday, February 06, 2014 7:59 PM by Tim
I'm sorry Tim but no, AmeriFirst is not licensed in Lousiana.
Posted @ Thursday, February 06, 2014 8:14 PM by Dan Moyle
Thanks for sharing the each post.your other post is monthly update,i am reading the other post.  
Posted @ Friday, February 14, 2014 2:28 AM by Milwaukee Refinance
There isn't associate quantity of your time needed. It should be your primary residence. aside from that welcome to sell when the work is complete.
Posted @ Friday, February 14, 2014 2:32 AM by Milwaukee Refinance
What is the lowest possible credit score that you would accept for the 203k streamline loan? My credit is very poor but improving and I have a house that I am extremely interested in purchasing but it needs work.
Posted @ Saturday, March 08, 2014 6:08 PM by Mandy
Mandy - credit score is just one factor in many when it comes to mortgage approval. A general range to start with is about 640. However, working with a mortgage consultant is the best step so they can help you get your credit and finances in order.
Posted @ Saturday, March 08, 2014 7:43 PM by Dan Moyle
i was a 546...they said 6 points lower & i couldnt have got the loan...its 540
Posted @ Monday, March 10, 2014 11:06 AM by THERESA
What type of interest rates and APR can one get with good/great credit? Also does one need to take out lender insurance? All in, what is the range in rates, especially on the lower side?
Posted @ Tuesday, March 11, 2014 12:49 PM by Andrew
Andrew - interest rates change daily. You're better off talking to a mortgage consultant about your particular situation, FICO score and other financials. Rates for 203k loans are generally very competitive with 'regular' rates, albeit a little bit higher. And yes, FHA loans do require mortgage insurance. Another option may be a HomeStyle Renovation loan if you want to avoid MI. 
Posted @ Tuesday, March 11, 2014 1:19 PM by Dan Moyle
I would caution anyone who uses this program and hire a professional inspector. Our "Hud" inspector missed multiple items. i.e. new roof, new wall studs, costing 10s of thousands. you'll clearly see in their contract "Inspector is not liable for any deficiencies found after inspection"
Posted @ Monday, March 17, 2014 5:00 PM by J
J - It's unfortunate that you had a bad experience with your inspector. That's certainly not what we like to hear. We try to ensure the inspectors and HUD consultants we work with meet high standards. Hopefully you were able to rectify the situation and enjoy your home.
Posted @ Monday, March 17, 2014 5:49 PM by Dan Moyle
@Theresa who did you go through to get your loan? I am probably above a 540 now!!!
Posted @ Thursday, March 20, 2014 8:55 AM by Mandy
@mandy...I first was qualified for fha thru pnc bank but the house I liked needed repairs so the realtor recommended that I do a 203k streamline loan...she got everything set up thru Prime Lending, which they are awesome too! I live in Louisville, Ky, if you are close I can give you her name & phone number...just lemme know...they might have offices other places too
Posted @ Thursday, March 20, 2014 2:03 PM by Theresa
oh...the interest rate was just a little higher than the normal...I locked in at 4.75...norm was 4.50. Also I had a HUD inspector, but also had to have another inspector which he was awesome, very thorough! I do have to pay a mortgage insurance but ive lived there for 6 months & am gonna refinance to get that off...probably next month! This was the only option I had to getting the house I actually liked & could afford! so its worth the extra $600 to use 203k loan & free refinance to get a home that we love & will live in the rest of our lives:)
Posted @ Thursday, March 20, 2014 2:09 PM by Theresa
Ideally, I'd like to repair the interior of my townhouse, and replace the windows. I need new flooring, carpeting, etc, and the basement needs to be renovated (new flooring and walls). I can do some of the interior work myself. Right now, I can't afford to buy any materials. If I could afford to do that, then my house would appraise well and I would refinance my house and get cash out to pay down credit card and medical debt. However, I'm deep in credit card and medical debt. I owe ~ $26K in debt and $80K for mortgage. The county assessed the house at $250K (but they haven't come in the house). Would this 203K program be useful for me?
Posted @ Saturday, March 22, 2014 2:45 PM by Dave P
Dave P.  
 
The FHA 203k or possibly another renovation loan might be a good option for you since your home is in need of renovation and updating. Unfortunately, the renovation loans that we and most other lenders offer do NOT allow cash-back to pay off credits cards or other debts. You may consider using a renovation mortgage in order to get your home in the best appraising condition, and then, if possible, use a different mortgage product by refinancing a second time to pull cash-out to payoff those pesky medical bills and credit cards. I'm happy to refer you to a loan officer who would work hard to assist you in your needs if you and your home are located in a state that we do business in. Email me if you'd like that referral.
Posted @ Sunday, March 23, 2014 8:30 AM by Joe Daly
I am a general contractor that has been working with 203K loans for six years now. They're great loans, and yes there are horror stories from contractors, customers and banks. First, find a contractor that understands 203k loans thoroughly and who can handle paperwork. Second - DO NOT USE WELLS FARGO!!! I was introduced to 203k loans by someone who worked for WF and they eventually quit because WF is horrible. I recently finished a streamline loan and the customer started to become sketchy. I contacted the bank and they sent out an independent inspector to inspect the job - the report came back 100% completed. To date, the customer has not contacted the bank and I have not been paid - it is over a month now. WF is doing nothing about it and will not be able to close the loan for FHA. The lack of support for the contractors and buyers is horrible. I am now prepared to go to arbitration and file liens. 
 
This is one example but I have also dealt with the underwriters passing along the wrong paperwork (after their requests for changes) or Bid On Repairs to the Disbursement Specialists three times now. WF is absolutely ridiculous. Go to a smaller bank. I have only had these problems with WF and I have worked with multiple banks.
Posted @ Monday, April 07, 2014 1:07 PM by GC Dave
Really it’s a great post.
Posted @ Wednesday, April 09, 2014 5:51 AM by DexterDavis
I am a single father with two kids. I have a three bedroom house and have little to no equity in my house. I am getting married again and need to add two bedrooms onto my house since my fiancée also has two kids. I can add dormers on the house and create the bedrooms upstairs but I need money to do it. Any suggestions? Could I qualify for a 203k rehab loan?  
Thanks for the help
Posted @ Wednesday, April 09, 2014 9:47 AM by Larry
Laryy - on the surface it sounds like it would work for your situation. Here's an article that talks about that:  
http://www.amerifirst.com/amerifirst-blog/bid/81223/Refinance-and-Remodel-with-the-FHA-203k  
My advice is to talk to a mortgage consultant about the hard numbers. You may find another option you haven't thought of, or you may decide the 203k is perfect, all based on the numbers.  
 
Thanks for the great question! 
Dan / marketing
Posted @ Wednesday, April 09, 2014 10:01 AM by Dan Moyle
We do many many 203 K loans rehabs M & T Bank Wells Fargo and West Penn Financial ..we have active jobs currently with all 3 lenders
Posted @ Monday, April 14, 2014 3:38 PM by john Hancock
Hi, 
I am considering getting a 203k loan on my current home to upgrade and fix some issues. Do you know if you can bundle a basement dig out into the loan. The net result is the same as an addition. It will add another room to my home. Do you know if the 203k will fund such a dig out? 
 
thanks, 
Anthony
Posted @ Wednesday, April 16, 2014 6:37 PM by anthony
Anthony, 
The 203k does indeed help finance some basement work. I would suggest talking to a 203k loan mortgage consultant about your particular house and situation. You can find an office here http://www.amerifirst.com/office-locator/ or email me for assistance finding an office dmoyle -at- amerifirst -dot- com 
 
Thanks!
Posted @ Thursday, April 17, 2014 7:02 AM by Dan Moyle
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