How hard is the 203k renovation loan program for Realtors

Here are the comments I have heard over the last few months:

1. The 203K program is hard to get done.

2. The 203K program is easy as pie.

3. Loans take forever with a 203K and we keep missing deadlines.

4. Loans can close in 30 days with the 203K.

5. I love the 203K.

6. I hate the 203K.

What do you make of that? Experience is very important to avoid the confusion. How easy or hard is the 203K?

Recently renovated kitchen

That depends on the team you end up with:

1. Your buyer gets prequalified from and experienced 203K mortgage broker.

2. Your buyer signs a purchase agreement.

3. The FHA inspector or 203K consultant is called and does an inspection.

4. Buyer calls and experienced 203K contractor.

5. Contractor helps your buyer figure out what everything costs.

6. Contractor sends the estimate and all the related forms to lender.

7. Lender processes mortgage.

8. Appraiser blows up the deal

9. Loan closes.

Okay, item number 8 was meant to make this light hearted. The property does have to appraise out though – just like any other sale.

Loans can close in 30 days using the 203K if the lender and the contractor are experienced. When looking for a experienced loan officer, ask them how many 203K loans they have done. No experience is likely to mean more headaches.

When looking for a good 203K contractor ask these questions.

1) How many 203K projects have you done?

2) What is your process for dealing with the paperwork?

3) How long does it take to get the paperwork done?

My first exposure to the 203K program has an interesting story. I was called in at the last minute because a contractor whom the buyer had a relationship with bailed on the project at the last minute because he wasn’t able to wait 45 days for the last half of his payment. The loan blew up – but the lesson was important.

Use experienced people.

The 203k program works!

Fred Sweezer Sr

Certified Home Inspector
Certified HUD 203K Consultant S0712
FHA Compliance Inspector T477