Hi all, I am thinking of making an offer on a home that could use some cosmetic updating/modernization (but nothing structural). Via the conventional lender I am pre-approved through, I had wanted to offer the seller list price in exchange for $3-$4K to be held in escrow after closing for the updates. My buyer's agent said that conventional lenders usually balk at this and give people a hard time who want to finance home improvements in the primary mortgage. He mentioned that I should try an FHA 203K loan (http://www.hud.gov/progdesc/203k--df.cfm), which allows people to finance home improvements. But he said that the appraisal costs were higher since you have to hire an FHA appraiser AND hire an FHA person to appraise the home improvement efforts (? didn't understand this part). Anyway, Has anyone here done this loan or brokered this type of loan? What's the good, bad, and ugly? My agent says that not every broker knows what they are doing when they package these for people - so I'm just trying to find out about any potential pitfalls. Also - does anyone know why conventional lenders don't like to finance home improvements in the primary loan? As far as I can tell, why would they care what gets financed as long as it comes under appraisal? Thanks,
Marci, I don't know if you ever got any kind of an answer, but if you go to www.203k.net (also www.203k.org and www.203k.com), you will find many answers. Mr. Andrew Moore (owner of the site at www.203k.net) is extremely knowledgable about 203k loans, and I found him to be very helpful. Cheers... FP
Marci, Your CN email is turned off. Send your contact info to me at MentorForWinners@aol.com? Thanks/Mark
Mark, I enabled my CreditNet e-mail, so please send me an e-mail. I won't get it until I get off work. Also - be careful about posting your real e-mail address. I did that once, and somehow someone picked it up and all I get is porn, credit offers, etc... A real pain to deal with. Try excite, yahoo, or msn for a fake e-mail addy.
I’ve been tossing this idea in my head for some time and I guess it’s worth a try. I’m planning to work this out with renovation lending specialists at Prospect Mortgage. I’m no expert when it comes to this type of loan (FHA 203K loan). I’m seeking someone who will work closely with me and my contractor. Btw, anyone here knows what the required reports are and documents needed in order to fully underwrite, and close the loan?
