FHA 203K Renovation Loan

Your Portland 203k Mortgage Lender

How can the FHA 203k rehab loan program help you?
Adventures in 203k Renovation Lending

Everyone seems to have their own opinion about the FHA 203k renovation loans…and many seem to be negative. Why is that, I wonder? Is there a bit more paperwork involved? Yes. Is this loan well suited for everyone? Not necessarily. And remember…all loan officers are NOT created equally so unless you align yourself with someone who specializes in this product before moving forward (ahem – me), you could be in for a world of hurt.

So what is the big deal with an FHA 203k loan?

Well, first of all, it allows almost any FHA qualified family to purchase a home and finance the cost of any needed repairs, wanted upgrades or to finance the renovation of their current home using one mortgage. Whether you’re replacing the roof and all of the flooring or doing a massive structural overhaul, this product might just fit the bill.

Secondly, it allows a new home buyer to purchase a home in an “as is” condition and to start the repair/renovation process with their chosen contractor after they become owners. This is critical for bank owned homes or other properties that are in disrepair where the seller is unwilling or unable to take care of the required repairs prior to closing. Without the use of the 203k Renovation Loan, these homes will sit on the market for weeks or months and continue to deteriorate while the listing agent waits for that perfect cash buyer.

Additionally, since the 203k program allows buyers to take advantage of the “future” appraised value of their home (ie: their home value after all of the planned construction is completed) many purchasers walk in with instant equity which is a win/win for both buyer and real estate professional.

With the housing market heating up all over the country, move in ready homes are going pending almost immediately, escalation clauses are on the rise and the competition to get the home of your dreams is starting to get pretty hectic. Smart home owners and expert real estate professionals are looking at homes with good “bones” or desirable lots and turning them INTO their dream home using a renovation loan.

So why hasn’t everyone figured this out?

My guess is lack of knowledge about the program and a desire for real estate professionals to stay in their comfort zone, as opposed to branching out and learning a new program. But fear not, the FHA 203k loan is not new! It is simply an FHA loan with an underlying renovation component. By educating yourself about the process, aligning yourself with the right professionals and trusting the program, you could be moving into a completely remodeled and modernized home before you know it.

For more information on FHA 203k Renovation Loans, please call me directly at (503) 453-6849.