So we have gone through a lot of different scenarios about FHA 203k rehab loans and we have done a bunch of question and answer sessions and we will continue to go down that path with this blog- but I think its time to give you a clear concise list of things to do. This will be a two part blog series that will include a checklist depending if you are looking to use an FHA 203k rehab loan for either a purchase or a refinance because each type of loan has its own steps. Some steps are the same but depending on the situation the order could be somewhat different. Remember the whole idea of this series is to give you the path to getting the FHA 203k renovation loan that you are looking for with the less amount of obstacles, stress and aggravation.
Here are the steps and we will try to get into each step with a little depth. If it starts to get too long we will break this post up into a few parts.
- Pre-approval— This is your starting point before even looking at properties. You need to see if you qualify based upon credit, income and assets. Minor credit problems can be worked through and sometimes we can look at using a non-occupying co-signor if you are close on income to help you qualify.
- Find a Realtor®– Its is important to find a Realtor® that has experience working with FHA 203K loans just like it is important to find experienced loan officer. If you are in any of the states that I am licensed in I probably have a few recommendations that I can give you- just ask.
- You’ve Found a Property– Now what? With a FHA 203k your best move is to do a feasibility report. A feasibility report is a scaled down version of a FHA 203K consultants work write-up. The idea here is that you only pay a small fee (usually around $200) to see what it will take to get the property up to minimum FHA property standards. You do not want to buy a Money Pit. Plus this will give you a something to use to negotiate your sales price.
- Pick your Contractor— This one is important- we do not allow for customers to do “self help”, this means we want you to have a licensed and insured contractor working on your project. Also if the contractor you have selected has not done an FHA203k project before then it is important to have the FHA 203k consultant and /or the lender explain to him or her exactly how the loan works and what they can expect. This is extremely important to the process- we want everyone to know exactly what there role is.
- Close your loan and Start the Work! — Now that all the paperwork and the loan has closed its time to get to work and get the house ready for you to move in.
Of course there are more steps along the way but I am trying to give you an overview of what to expect. The FHA 203K Rehab loan process can take more time and add some additional steps to buying a house but the great part is you get to create “Your New Home”- you pick and design what you want and the program allows you to do it all in one easy to use program.
Feel free to contact me with any questions regarding the FHA 203K program. I am always available!
Jeff Onofrio — Office 856-505-6717 Mobile 609-217-9409 firstname.lastname@example.org