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Buying or Selling a Home/FHA 203K, Conventional Rehab Loan
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Question
Hi
I came across a bank owned property (reo) which Iam interested in and which need lot of work. So I may need regular mortgage loan+ contruction/rehab loan to fix the house.
I heard abt FHA 203K loan which provides rehab/construction loan.
Is there any other conventional mortgage loan products available for rehab/constuction ?
what will be closing costs with FHA 203K ? is higher or lower compared with conventional loan ?
Found out from Bank is not ready to sell without taking rehab loan. What all other options I have with mortgage loans?
Thanks much
Jay
JAY--
In addition to the FHA 203K Rehabilitation Loan, "Fannie Mae " similar product they call a HOME STYLE Loan!
Both of these loan products are available to qualified Borrowers and provide for BOTH "Purchase Money" AND funds to be used to Rehab, Renovate or Repair a Home. The FHA "K-Loan:" is available ONLY to "Owner-Occupants," while the Home Style Loan is offered to BOTH Owner-Occupants (folks who'll live in the home) AND Investors (people who're buying to rent or re-sell the house).Down payments are 3& and 5% respectively; interest rates are "market"--same as for "traditional" mortgage loans!
Except for the eligibility of Investors for the Home Style Loan, these two loan products are very similar.Closing Costs for these loans ARE slightly higher than "traditional" mortgage loan costs, as there's more work--and risk--for the Lender both before and after closing of the loan. Usually, however, the Buyer/Borrower who spends "a few (well-placed)bucks" on its rehab & renovation will find him/herself with a "pretty equity picture" on completion of the work that's being done with the "Repair Funds."
Not all Lenders will do a 203K or a Home Style Loan! You need to shop around for one--and find a Loan Officer who's got some experience with originating and processing these "Complicated" loans.
Further, I suggest that you go to the HUD/FHA Website (www.hud.gov OR www.fha.gov ) and find the info on 203Ks. It will explain the whole program to you. GOOD LUCK
--JIM
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Jim Root
Expertise
How to select the right Real Estate Salesperson & Loan Officer--ones who will serve your best interests! House-hunting tips & suggestions on selection of the home best for your family needs. Introduction to the Home Buying Process & all the "Players" involved.What is of utmost important to the Homebuyer? Real Estate Contracts & Negotiations, Appraisal needs, Title Co. involvement, Home Inspection issues& the Closing/Escrow systems, etc. Whatever your question, the answer will follow, whether from personal knowledge or research! Gale, shown here with me, has been a Real Estate Office Administrator, licensed Realtor & has served as my Research Assistant over the years!
Experience
Over 30 years as a "Real Estate Professional." including Real Estate Marketing & Sales, Appraisal work, Mortgage Banking & as a Realty Officer with U.S Dept. of HUD's FHA Homeownership Division in Alaska, Washington & Idaho! Some experience in Montana, California, Utah & Nevada markets!Knowledge of National Markets by continuous Research!
Organizations
Former member of Nat'l Ass'n of Realtors (NAR) & Mortgage Bankers Ass'n of America (MBAA). Currently with National Association of Review Appraisers & Mortgage Underwriters (NARA/MU).
Publications
Published in various local, state, regional & national Real Estate-related magazines & newsletters!Co-author of various Govt. publications on Homeownership, Appraisals & Mortgages while with HUD/FHA.
Education/Credentials
Associate Degree in Real Estate Studies plus:
Numerous Real Estate-related Courses conducted by the U. S. Government & Private Industry over the past 30 years.
Bachelors Degree in Mass Communications,
Masters Degree in Education/Teaching
Awards and Honors
Professional Designations: Certified Residential Originator (CRO) from MBAA, Registered Mortgage Underwiter (RMU) & Certified Review Appraiser (CRA) from NARA/MU. Outstanding Peformance Awards for 10 of the 12 years with HUD/FHA & numerous Sales/Listing Awards while a licensed Real Estate Agent.
Past/Present Clients
No longer selling/listing Real Estate, nor Appraising properties, nor working in the Mortgage business, this "Real Estate Pro" serves as Director of a Company that provides Professional Development Seminars & Workshops to the "Real Estate Industry" and provides free (as needed) & fee-paid (on a sliding scale) consulting & inspection services to members of the general public.Your questions will be answered without "salesmanship" & with your best interests in mind!
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