I'm looking into FHA's and I came across an article on 203k's and how they help with repairs/updates. Does anyone know if it makes a differance to apply for one or the other when buying my first property? Thanks everyone! This community has been insanely helpful.
@Maritsa Cortes A 203k is a type of FHA loan. So all 203k loans are FHA loans, but not all FHA loans are 203k loans. Hope that helps
I wouldn't apply for a 203(k) loan unless I needed it due to extra paperwork and cost. If you do have work you want to do on the property OR there is something about the property that will keep it from being given an affirmative appraisal to get the loan, you may want to consider the 203(k). If you have a small amount of work to do, you can apply for a 203(k) streamlined loan, which limits your rehab to $35K (less in actuality due to fees). Streamlined loans do not require the use of a 203(k) consultant.
@Larry S. Thanks for your reply Larry! I did know that a 203k is an FHA. I was just wondering if it mattered which I applied for. The property will most likely need a few upgrades.
@Phil G. Thanks for your reply Phil! This info helps. The property will most likely need a few upgrades. Just wondering if it was best to go with the 203k right away or take out another loan for repairs after financing with an FHA?
I would do one loan.
There's also Fannie Mae's Homestyle loan which also combines purchase with rehab. If you're purchasing a single family, you can do a loan with LTV of 95% (97% if first time buyer). Two units 85% LTV and 3-4 units 75%.
@Phil G. Thanks a bunch Phil! This helps a bunch. I'll look into this :)