Multifamily units and 203k loans???

7 Replies

Hello BP community,

I just watched Brandon's multifamily seminar last night and I had a question. He cited that the 203k loan program was available for multifamily units, however my broker (located in WA State) shot that down when I met with him a couple of weeks back saying that 203k loans could not be used. On the HUG.gov (http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k) it states that the 203k doesn't apply for multifamily units. Do any of you guys in the community have any literature stating that the 203k loan program can apply for multifamily units in the state of WA? I would like to share this info with my broker. I sent a message to Brandon (still awaiting a reply), however thought I would post this question in the forums as well.

The HUD multifamily product is not for small complexes. I think the minimum loan size is a couple million and the fees are high due to the number of 3rd party reports required along with the underwriting. I think the broker wanted a 50k deposit in order to get started.

@Gary Waldron 203k covers multifamily units (1-4 units). It does have to be a primary residence so you would have to "house-hack" & live in one of the units. You can also ask about the Fannie Mae Homestyle Loan which is similar to the 203k, but allows for the property to be investment property, a 2nd home, or a primary residence.  

Unless your broker IS a mortgage broker or lender, I would highly suggest speaking with a mortgage broker or lender that specializes in 203k or Fannie Mae Homestyle loans in Washington. They would know the specific requirements for your county. I do have literature regarding 203k loans, however, it's for Colorado buyers, but the principals are the same. The only differences are the allowable loan amounts.

I followed your link and it didn't say that the 203k isn't for multifamily, it just emphasized single family homes. If I were you, I'd do some research & maybe Google "203k lenders in Washington state". To be honest, there are many lenders who quite frankly don't know how to do 203k loans - its simply not their area of specialty. Renovation loans have been rumored to be "difficult", "not available", etc. You need to really find a lender that knows what they're doing and are experienced in these types of loans. Hope this helps. 

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@Gary Waldron I agree with @Adilah Curry. You should really find a mortgage broker that is familiar with the HUD and the 203k Loans. I have also found that not all lending institutions such as banks are knowledgeable of all the different government loans. This is also true with the USDA and the VA loans.

I wish you the best of luck in your search.

Originally posted by @Adilah Curry :

@Gary Waldron 203k covers multifamily units (1-4 units). It does have to be a primary residence so you would have to "house-hack" & live in one of the units. You can also ask about the Fannie Mae Homestyle Loan which is similar to the 203k, but allows for the property to be investment property, a 2nd home, or a primary residence.  

Unless your broker IS a mortgage broker or lender, I would highly suggest speaking with a mortgage broker or lender that specializes in 203k or Fannie Mae Homestyle loans in Washington. They would know the specific requirements for your county. I do have literature regarding 203k loans, however, it's for Colorado buyers, but the principals are the same. The only differences are the allowable loan amounts.

I followed your link and it didn't say that the 203k isn't for multifamily, it just emphasized single family homes. If I were you, I'd do some research & maybe Google "203k lenders in Washington state". To be honest, there are many lenders who quite frankly don't know how to do 203k loans - its simply not their area of specialty. Renovation loans have been rumored to be "difficult", "not available", etc. You need to really find a lender that knows what they're doing and are experienced in these types of loans. Hope this helps. 

Thank you this information. My agent has worked on a lot of 203k deals in the past, so I plan on working with her to get to the bottom of this. Without doing a 203k deal the inventory that I would be able to get my wife on board with would be "limited". As they say - Happy Wife Happy Life. I will also google some more on "203k loan program in Washington state".

@Gary Waldron

I am a broker that understands the 203k avenue for Multi-Family. I also have a lender that is very fluent in the details for the program. You can also contact @Kerry Smith , who has been through the process of the 203K loan on a duplex he acquired and is house hacking in Olympia. Feel free to call or email me anytime.

Good luck,

Tim

Hello Gary,

I sincerely apologize for not answering you sooner.   It has been a very busy time.

I my have had a limited  amount of experience with the 203k however like Timothy I have a very knowledgeable mortgage broker (in Tacoma) that I rely on who is very well versed in all the loans.  If there is a better way to fund the project other than the 203k he usually will suggest that depending on the situation since there are some extra costs that accompany the 203k 

Like I stated before it is wise to put a mortgage broker on you team because they usually can answer your questions very quickly with a text message or a  call.

Again I apologize for not answering you sooner. Good luck with your project.

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