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203k Frequently Asked Questions
What does an FHA 203k Loan Consultant do?
The FHA Consultant assists in determining if FHA 203K loans, Homestyle loans, VA loans and other similar type loans are feasible for the Mortgage lender. If feasible, the Consultant produces an estimate of all required repairs and desired renovations, helps facilitate choosing a contractor and the smooth processing of the transaction. After closing, the Consultant monitors the appropriateness of the construction and repairs until the project's completion. The contractor's work is inspected by the Consultant at intervals throughout the project as portions of the work are completed and prior to each portion being paid out to the contractor.
What is a 203K loan for?
A 203K loan, like a Homestyle loan or a VA loan, allows for the purchase of the home with renovation costs all in one loan, for a low interest rate. The 203K loan can also be used by existing homeowners as a refinance that includes renovations. Applicants do not need good credit and the loan maximum is an impressive, $822,375. Speak to an experienced 203k lender and then hire a 203K Consultant to find out if this loan will work for you and the home you're interested in.
Is the Feasibility Inspection the same as a Home Inspection?
No, the Feasibility Inspection only looks for Minimum Property Standards and helps determine if the mortgage will be feasible for the lender to approve based on the inclusion of renovation costs. A Home Inspection covers much more detail of the condition of the home and it's many components.
What are the benefits of hiring a 203K Consultant?
A 203K Consultant is similar to a project manager.
The Consultant completes a great deal of paperwork and shares paperwork with the lender from pre-purchase to the completion of renovations after the closing.
The Consultant will make sure you don't overpay the contractor or hire a contractor who is underbidding just to get the job.
The Consultant will periodically inspect the renovation work as it is being completed and facilitate payments to the contractor as parts of the work are completed satisfactorily.
How can a 203K Consultant be a Deal Saver?
Have you ever had an accepted offer on a house only to discover the home has expensive issues to fix? The homeowner won't adjust the price, or make the repairs, you or your buyer can't afford to make the repairs and the deal doesn't go through. But you know something others don't and you call a 203K Consultant to the rescue. The Consultant does a minimum property standards inspection, and determines the cost to repair problem areas, works with the lender or helps you find a lender experienced in 203K loans. If the lender approves, the Consultant assists with getting contractor bids and within a few weeks, you've gone from a dead deal to the closing table! How did you get here? It was the 203K loan.
Realtors, this works for ALL of your clients. Be the Hero Realtor!
The current loan limit for a 203K in our area is $822,375 this includes long Island, the five boros and southern NY counties! The 203K is not only for major renovations, it can help with homes that simply need updating, and it can cover asbestos remediation or mold remediation. There are tons of homes that you could be selling more easily by telling your clients about this FHA loan.