I was just wondering if anyone here has ever used the 203k investor program to finance there rehab costs and purchase costs? If so how did it work out?
I have some experience with it. It can be complex, but a great device. Much depends upon who administers the loan. Try to get a senior loan officer at a direct lenders' office. Don't think there are any shortcuts... just play by the rules and you'll be OK.
The greatest feature (if I can recall) is the full assumability of the loan upon resale.
I haven't done one (mercifully) in years. There was a minimum rehab dollar amount necessary to qualify for a 203K.
There were some repairs/renovations which could not be included in this program.
If the rehabber and the borrower were one and the same, then only materials could be funded-- not your labor.
There's a before and after appraisal done-from the get go. The repaired value is the amount that your buyer can buy from you.
There's a rehab period without any payments. If you have a decent contractor you can get in and out with out being saddled with a cash drain.
The secret is to find a lender who does a lot of them. Most mortgage companies don't have the expertise and you will have nothing but problems/delays while they go to school at your expense.
These are my recollections from 15 years ago. Needless to say, you need to get a copy of the current regs.
Just to clarify a point, I awkwardly made in my previous post---. there are certain repairs/remodeling/renovations expenses which do not qualify for 203k funds. It's been so long since I did one, that I can't give an example off the top of my head. They are clearly delimited in the reg.
The maximum mortgage amount for this program is no different that any other HUD program.
I don't think Hud is offering 203K program to investors anymore. We tried to get it six months ago, then we were told by Wells Fargo that HUD did not offer this to investors. You did get Fannie Mae Homestyle loan instead. It is very similar to 203k. [ Edited by SmileyFace on Date 10/30/2003 ]
I have some experience with it. It can be complex, but a great device. Much depends upon who administers the loan. Try to get a senior loan officer at a direct lenders' office. Don't think there are any shortcuts... just play by the rules and you'll be OK.
The greatest feature (if I can recall) is the full assumability of the loan upon resale.
I haven't done one (mercifully) in years. There was a minimum rehab dollar amount necessary to qualify for a 203K.
There were some repairs/renovations which could not be included in this program.
If the rehabber and the borrower were one and the same, then only materials could be funded-- not your labor.
There's a before and after appraisal done-from the get go. The repaired value is the amount that your buyer can buy from you.
There's a rehab period without any payments. If you have a decent contractor you can get in and out with out being saddled with a cash drain.
The secret is to find a lender who does a lot of them. Most mortgage companies don't have the expertise and you will have nothing but problems/delays while they go to school at your expense.
These are my recollections from 15 years ago. Needless to say, you need to get a copy of the current regs.
"The repaired value is the amount that your buyer can buy from you. "
To my knowledge, there are no upper end resale restrictions. Perhaps Sammy was referring to the maximum mortgage assumption amount.
Just to clarify a point, I awkwardly made in my previous post---. there are certain repairs/remodeling/renovations expenses which do not qualify for 203k funds. It's been so long since I did one, that I can't give an example off the top of my head. They are clearly delimited in the reg.
The maximum mortgage amount for this program is no different that any other HUD program.
I don't think Hud is offering 203K program to investors anymore. We tried to get it six months ago, then we were told by Wells Fargo that HUD did not offer this to investors. You did get Fannie Mae Homestyle loan instead. It is very similar to 203k. [ Edited by SmileyFace on Date 10/30/2003 ]