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Can someone explain a 203K mortgage loan? We are looking to rehab an older home.

by trisha.st_09362 from South Sutton, New Hampshire. Dec 11th 2015 Reply


Steven Karp (stevek81)
#29 ranked lender in Massachusetts - 122 contributions

Hi Trisha, That is rather complicated question to sum up in this small space, in a nutshell, there are 2 versions of the 203K, this is an FHA program. First version is the less complicated 203k Streamline....it is restricted to a $35,000 maximum renovation with 10% of that as a built in contingency, then there is the full blown FHA 203k with no real caps on spending, but a ton of documentation and Field inspections of the property, It is highly regulated for the most part, but still a great program. Freddie and FNMA also have similar versions...this type of renovation program requires extreme hands on people being involved....lots of paperwork too...If you would like to chat please feel free to reach out to myself Steve Karp at Cell 781-640-5592 or thru email at skarp@homeloanbank.com I have done many of these over the last 25 years and know these programs very well....in fact I am sure any of the good folks here with me on Lender411 would be more than happy to help you guys out....

Dec 11th 2015
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,041 contributions

Steve explained it pretty well.. I would say that the HomeStyle renovation loan is far better than the FHA loan product.. With FHA, you must hire an FHA consultant (at your cost), and there are some improvements that are not allowed, plus your limited to a maximum FHA loan amount of $271,050.. but with the HomeStyle reno loan, no consultant required, there are no restrictions as to which improvements you wish to do, and you can go to $417K loan amount.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Dec 11th 2015
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Hi Trisha,We have a 203k department that works as a team and we are located not far from you in NH.If you want to talk on Monday feel free to call me at 6038934100 Thank you,Pamela Riesenberg Branch ManagerFinance of america mortgage Www.mortgagesbypamela.com

Dec 11th 2015
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Jim Collins (JimCollins)
#10 ranked lender in New Hampshire - 4 contributions

Hi TrishI am a local lender in Portsmouth NH and will be happy to discuss the requirements and process with you. Feel free to contact me at 866-702-7286 or jim@bluewatermtg.com

Dec 11th 2015
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Ron Schwartz (RonSchwartz)
#70 ranked lender in Maryland - 56 contributions

Hi Trisha!I'm a displaced New Englander but our company is licensed in NH...so in either case I'm happy to assist. Many home owners are seeking the home of their dreams. Still more want to modify their current home to meet their family's needs.In either case a renovation loan can help. There are several flavors of these loans. The FHA 203k loan program has two flavors suit different sized projects. The smaller of the two is the 203k Streamline. This is for a home that needs less than $35,000 in repairs (Less than $30,000 is usually budgeted ion this loan). THis loan is limited both in its size and the scope of work that can be done. For example, only non-structural repairs are allowed under this program. There is also the 203k Renovation loan known to many has the "Full-K" or "consultant K" which is far less restrictive and involves a professional construction consultant certified by HUD to help the homeowner scope the plan into a required-package so that bids and true estimates can be adhered to by those executing on the plan.Fannie Mae offers the HomeStyle Rehabilitation loan under their conventional loan program and it operates similarly. But this program even allows homeowners to finance luxury items like swimming pools.Your loan officer can help you to right-size the loan for the project and, perhaps most importantly, what you would qualify for.Here are a few rules that apply to all of these types of loans.1. Your loan will be based on the acquisition cost of the home plus the renovation budget including some additional budget for safety. This is called the Contingency Reserve.2. You will be allowed to borrow up to 96.5% of the combination of these for an FHA 203k. as long as these add up to no more than the appraised value plus10% at completion. So. If your purchase price is $100,000 and your renovations are $100,000 then you can borrow up to 96.5% of $200,000 under an FHA 203k loan. You must qualify for that amount.There's a lot more to learn but overall, if you keep this in mind then your loan officer can help you through the small stuff.Happy Holidays Trisha! Enjoy your project.Ron

Dec 15th 2015
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