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Limited 203k vs Standard 203k
The FHA 203k is for properties that require some amount of repair. I say some amount as there is no minimum however many lenders have created their minimum. This loan has two facets. Once is for smaller quick fixes that take about 30 days + but no more than 60 days to complete - to complete and require NO structural repairs. this is called the "Limited 203k" and used to be known as the "Streamlined k".Limited 203k: Typically includes repairing broken windows, replacing roofing materials, painting, replacing floor coverings, updated kitchens and bathrooms. NO structural work and repairs must be no more than $35,000 including costs and fees. That means if your lender requires a 10% contingency and $800 in fees you are actually looking about $32,000 as your construction maximum amount. Some lenders require a 20% so you are down to $28,200 for your actual construction limit.Standard 203k: This loan has a much higher construction limit. We just did one with a construction budge of $544,000 + 10% contingency. In never fails when I speak at a Real Estate Association when I ask if anyone has ever had a 203k fall apart due to the loan amount for the construction part being too small. I get a bunch of hands come up... then I ask, was the construction about $40,000, and most of them say yes, how did you know?This is when I drop the bomb... it wasn't that the FHA 203k program limits were too small but the lender you went to didn't offer the "Standard 203k" and wasn't a team player. They were more interested in keeping the loan in play for them to hell with the buyers desire to buy this particular property. So they told the borrower to find another property. Had any of these deals been with a knowledgable Realtor they could have received their commission sooner, sold that property and not had to go back to the drawing board and seek another property for their client. Who was served by a lender who told them the construction budget was too high... only that lender, not the Realtor, not the Buyer Clent. Are you setting yourself up for a law suit by not knowing what programs might be the best for your client? That is the question you should be asking yourself.What could have happened and should have happened if the Realtor had been up to date on this program would have been to find another lender Like Prospect Mortgage who does both type loans. Prospect Mortgage is a full service 203k provider and can do either type loan. They also provide the Fannie Mae version of this product.Typical improvements: Structural modifications for updating your home, opening up the walls to create great rooms, etc. Enlarging the kitchen, room additions, garage conversions, adding detached or attached garages, septic system replacement, drilling a new well for drinking water. All these items are possible with the FHA 203k program.Unusual uses for the FHA 203k: Fire torn areas like the fires we had in Lake County Fire and the Butte/Amador Fire, as well as the SoCal fire damaged areas. The victims need to know about how this program can help them faster than any other government program. It is actually a sister program to the 203k called the FHA 203h. It is like a 203k on steroids. If you know anyone that was affected by one of these or any other national disaster we can easily get you back on track to getting your home rebuilt. Call is at 707.812.7668 if we can assist you or someone you may know.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
Got a 203k project giving you "fits" contact www.203k911.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Skype name: the203kconsultant
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203k loan limits don't go high enough for my neighborhood
I'm afraid that is the harsh reality in many neighborhoods. What then, is the answer where the homes in my area are selling in the $1MM to $3MM or more. Not a problem at all. As all is good with another renovation product that is available and our group of renovation consultants can help you with that as well. This is just another reason that you should chose a "team" to close your loans faster.
The parameters for the loan I'm referring to will be disclosed mid February but you can start inquiring right now. This lender loans in all fifty states and the permanent loan includes renovation money. The maximum loan amount is $3,000,000 and of course there is a higher LTV required so you could be buying a home in the $4-5MM range including renovation costs and with your down payment your loan amount would top out at $3MM.
Get your renovation loans with one of our Team Members - Our consultant that cover this area is Pete Campbell
Well, now the loan program is in full swing, you can place your order by clicking hereand filling out the short order form.
High balance renovation loans are now available from Chris Davis at Everbank. Chris will fill you in on the loan aspects of this product but the short of it is that you now have a renovation loan that covers the higher end home up to $3,000,000 loan amount.
This is an amazing loan product and it doesn't have to be the entire amount... I've actually had a couple of calls where I was asked if we had a renovation loan for a $1MM purchase that needed $300,000 in renovation... YES, of course. LOL, the loan has a cap of $3MM but that means anything up to $3MM will likely fly just fine. I love this business.
While this loan is going to be available nationally shortly, it is only currently available in the following states, AZ, CA, CO, CT, FL, MA, MD, NJ, and VA. Comming to all other states as fast as the local LO's in those states get their in-house training on the program.
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FHA loan limits have been increased dramatically and that includes the 203k. Some real estate professionals are missing the boat with mixed use buildings, warehouses in residential neighborhoods, and larger income units from 5-8 units... all of these are 203k potential.
Warehouse - turn it into "Live/Work" units up to 4. Yes the owner must live in one unit but many people would live in a "Live/Work" unit know lots of other people who might like that too and become tenants. The additional rental units add income to the borrower's other income. If they can qualifiy for a SFR then they will likely qualify for this.
Mixed Use - ignore the commercial and work with up to 4 residential units in the building. If you could steal a 3 story building with multiple units... make them flats with commercial on the bottom floor only...
Start looking through your MLS files for larger type buildings that might fit these scenarios. We are here to assist you wherever you are. There is a "little known" feature of this product that allows "non-residential land use to residential use" if the zoning will allow it.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.
To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
Got a 203k project giving you "fits" contact www.203k911.com. If you are looking for quality 203k software for consultants to speed up the underwriting process...
Skype name: the203kconsultant
203konline.com