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lookig for more information about how 203k payment works with fha

how are the rehab funds paid back with the 203k option? do any lenders allow for everything rolled into the mortgage principal? by bbranson78426204 from Sherman Oaks, California. Nov 12th 2014 Reply


Dennis Hensling (dhensling@uamco.com)
#1016 ranked lender in California - 3 contributions

A couple of questions so I can give you an accurate answer. Is this for a purchase and rehab or refinance and rehab? If a purchase what is the purchase price and how much do you need for the rehab?Dennis

Nov 12th 2014
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,795 contributions

203(K) is FHA's rehabilitation mortgage program. Under this program you can finance repairs and certain improvements into a first position mortgage. The repairs must be done by someone other than yourself, and they must be licensed and insured contractors. FHA will also require a consultant (hired at a cost to you) if the improvements are greater than $5000. The funds are disbursed directly to the contractor's upon final inspection by the appraiser. When the appraiser inspects the property and looks at the projected improvements and estimates, he comes up with a value "Subject to" all improvements being made.. once the rehabilitation is complete, he reinspects. Your down payment is calculated by taking the sale price of the home, plus the estimated improvement costs, and multiplying by 3.5%. The better program is a conventional loan product called the HomeStyle renovation loan. With this program, you're not required to hire a consultant, and you don't have any restrictions on what type of improvements can be done, so long as the property's value is supported by the sale price and improvements, it's allowed.. you will need 5% down for this loan and the monthly mortgage insurance on conforming loans is much less for high credit score borrowers than FHA.. 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

Nov 12th 2014
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Barb Lanis (BarbLanis)
#72 ranked lender in Illinois - 662 contributions

Follow the excellent advice that William gave and then contact a lender licensed in your state.

Nov 12th 2014
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Larry Gray (lgray_312_247)
#5 ranked lender in California - 1,127 contributions

As far as the monetary limit on rehab. expenses on our streamlined FHA 203k loans, as a direct lender before you would have to pay for an FHA consultant is $35,000. Otherwise, we have no problem with much large loansThe rehab funds are paid as needed after the loan is completed. Usually the contractor will get an initial amount to get started on the projects. If there is an FHA consultant on the loan they need to oversee every step of the project gets completed. If it is a streamlined 203k loan then the contractor will be working directly with our 203k office on completing everything. Every expense will have already been predetermined and rolled into the mortgage loan.

Nov 14th 2014
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