203K Loans and FHA Streamline Loans?
I’ve been going back over old posts about 203K loans and the reviews are mixed, to say the least! Was wondering if anyone currently in the trenches had any new updates or advice. We’re currently applying for a standard FHA loan, but the inspection is turning up some work we weren’t expecting. Also, does anyone…
I’ve been going back over old posts about 203K loans and the reviews are mixed, to say the least! Was wondering if anyone currently in the trenches had any new updates or advice. We’re currently applying for a standard FHA loan, but the inspection is turning up some work we weren’t expecting.
Also, does anyone have any experience with the streamline loans? Are they less complicated than a full-out 203K? Anyone recommend a bank that handles them?
my wife and I are “currently in the trenches” of a standard 203K loan. Perhaps we picked horribly on a lender, have cursed heaven, or committed atrocities in a past life. Today (March 23 2011) marks day ninety two of the process. We have stellar credit and nearly enough disposable cash to accomplish what we need but opted for this product. We have yet to close despite submitting bank statements and years worth of W2’s THREE TIMES. Thanks W. Fargo! Oops, Wells F. We’ve paid almost a thousand dollars upfront for the appraisal and third party liaison (bank/contractor) so are stubbornly seeing this through. Ultimately, we will pay $5385 to finance $23,900 in remodeling costs according to the latest GFE. Awesome. No, a doctor did not remove a chromosome from me. We bought a foreclosure from hell and have spent enormous amounts of cash already on the roof, a bedroom, and some flooring. To preserve the final bit of cash we were introduced to this loan product. I hope I’m in the minority.
I’m nearing the end of a 203k project with Barry Koven, Keith Arthur, and Bullfrog Builders. It’s not nearly as difficult as some people make it out to be. Barry made the loan process quick and painless, Keith is doing a fantastic job of protecting all party’s interests, and Bullfrog is making our dream house a reality.
The most difficult part of an FHA project is finding a contractor that is willing to work within the constraints of the FHA process. They’re essentially giving you a bridge loan as there is no up-front money in the 203k. The reality is that the 203k is harder on the contractor than it is on the homeowner.
There’s also alot of bad info out there like that you’ll be forced to get contractor grade appliances and finishing or that you’ll have to make the bathrooms in your single family home ADA compliant.
Heather – The Streamline 203k is much easier and less complicated than the Full 203k as long as you work with a lender and a contractor who fully understand HUD guidelines for the 203k (paperwork, timelines, compensation structure, lender overlays, etc.). Some contractors have earned the designation as a Certified 203k Contractor, which is based on an intense education and testing process, as a method for consumers, lenders and Realtors to verify their competency with the 203k. You can check it out at the 203k Contractor Directory on http://203kContractors.com. Even though a HUD approved 203k Consultant is not required on the Streamline 203k, it is recommended that a consultant does the home inspection or at least a feasibility analysis of the property.
We’ve completed over 50 203k projects in the last few years and know them inside and out.
Streamline 203k’s are for work under 35k and the regular 203k loan is for work above that.
The 203k is a great product as long as you have the proper people (bank, consultant, contractor) involved than can help you avoid the most common pitfalls and delays.
Almost all our 203k projects involve Barry Koven at Wells Fargo and Keith Arthur as the consultant.
Feel free to contact us if you’d like any more info.
We used a streamlined 203k last year, and it worked great. It is much simpler than the standard 203k: no GC, no plans, no inspection, etc.
Essentially, if you need less than 35K in repairs, you can go streamlined. You just describe the work that needs to be done, line up the contractors (they have to fill out a bunch of paperowrk, but it was no big deal – our handyman did it with no problem), and the bank issues them a check for 30% of the contract price at closing. When the work is complete, you fill out a form, and the bank issues them a check for the remainder.
It was really very quick and simple, and a great way to finance some needed repairs.
About half of my current projects are 203 loans. They seem to work great and the clients like them. I have no experience with the actual closing, but for the actual design & construction part it works great.