I have been receiving a high number of phone calls asking questions regarding the FHA 203k rehab loan program. So I figured what a better way to start of the New Year by creating a series based around these questions. I will try to post each time I receive at least 3 questions- which means I should be posting daily 🙂
The questions I receive come from a variety of areas- from the simple “what is a FHA 203K” to the more complex “what is the FHA identity of interest form used for”. If you do not see a question answered here or you are a loan officer and have had a similar situation but a different answer please feel free to comment as I do not claim to be the FHA 203k all knowing but I have done enough and do spend my time learning daily so hopefully the things that I have learned will help you as a consumer to make an informed decision.
Questions #1- What is the FHA 203k rehab mortgage program?
In a nutshell- the FHA 203K mortgage program is a HUD insured loan that allows you to purchase or refinance a property that is need of repairs, rehabilitation or might just need to be modernized. By using the program you can “gut” a property, add square footage, buy appliances, replace rugs or repair hardwood floors, and the list goes on and on. The program comes in 2 flavors- the full FHA 203k program and the streamline FHA 203K. Click on each term to learn more.
Question #2- How much money can I get to do my repairs?
This comes down to the type of program and what comparables are going for in your area. If you are trying to use the FHA 203K streamline program then you are maxed out at $35,000. If you use the full FHA 203k program you can get as much as the value will allow up to 110% of the as completed value of the property. I will explain more about this down the road but I am currently doing one for a customer that is doing $150,000 of of additions and repair work! The program is meant to help everyone and everyone’s situation is different- so feel free to contact me and I will be happy to show you how the program can help you and your family.
Question #3- What is the FHA 203k consultant and do I need one?
FHA 203k consultants are not required when doing the streamlined version. However when you are doing the full version of the 203k program they are required. I really recommend the FHA 203k consultant to everyone using the loan program. I truly believe they add a lot of value to what you are doing as a consumer and they act as an advocate on your behalf. In my area I have a specific FHA 203k consultant that I use for both Northern NJ and I also have someone I use for Southern NJ and PA.
They are integral players in the process and I would always recommend using them. I am hoping to get them both to be guest posters here shortly and maybe they can answer a few questions in this series. I am putting there contact information below.
Southern/Central NJ and PA- Rich Allgood 215-882-1878 firstname.lastname@example.org
Thanks for reading and I will be posting more questions and answers as they come in- feel free to comment!