FHA 203K REHAB

9 Replies

I am wondering if anyone can shed some light on their experiences with this type of loan on an investment property (have heard it requires tons of patience)?

Is it true that they require the contractor to begin the job fronting the startup costs himself (trying to put myself in his shoes)?

Also, do you know of any other alternatives to the FHA 203k with the big banks here in NJ?

Thank you!

If they do require a contractor to front the start up for repairs consider that a good thing. It means they are legit are more likely not to flake out on you.

Your lender will have a few go-to contractors that are cool with the way FHA 203k makes them wait to get paid ("normal" FHA is actually FHA 203b fyi).

FHA 203k requires owner occupancy (but is available on multi-unit BOOM MAGIC HAPPENS HERE). It will not work for a non-owner-occupied investment property. Do not commit mortgage fraud.

Fannie Mae has a renovation program available to investors, but for SFRs only.

Renovation loans are a niche product, there are loan originators that ONLY do renovation loans and others (I do this, but not in your state) that'll do the cookie cuttie reno deals and refer you to a specialist if it's non-cookie-cutter.

Actually, at least on the streamline, they give 50% of the Reno to the contractor up front, with balance upon completion, which is generous. One contractor I talked to "couldn't live with that" and told him he was nuts, what the hell was he looking for?  When I was doing commercial contracting, I was lucky to see the first check within 60 days.

Originally posted by @Wayne Brooks :

Actually, at least on the streamline, they give 50% of the Reno to the contractor up front, with balance upon completion, which is generous. One contractor I talked to "couldn't live with that" and told him he was nuts, what the hell was he looking for?  When I was doing commercial contracting, I was lucky to see the first check within 60 days.

 Hello Wayne,

Can you please specify on "streamline?"? Because everything I heard is contractors need to front the money (which is okay on a smaller job but on a larger job that is a lot to ask of someone). 

Streamline (regular) $35k and under reno funding.  I did one a few months ago, the GC got $12k of the $24k estimate before work began.

Originally posted by @Wayne Brooks :

Streamline (regular) $35k and under reno funding.  I did one a few months ago, the GC got $12k of the $24k estimate before work began.

 Ah okay. This would be over 35k so in that case I have no other options?

Originally posted by @Ben C. :

I am wondering if anyone can shed some light on their experiences with this type of loan on an investment property (have heard it requires tons of patience)?

Is it true that they require the contractor to begin the job fronting the startup costs himself (trying to put myself in his shoes)?

Also, do you know of any other alternatives to the FHA 203k with the big banks here in NJ?

Thank you!

 Ben, let me help you out keep it simple: (3) Secrets Everyone Needs to know about using a 203k loan for more information on the 203k loan, loan process and how to build the right team for success.

Good luck to you!

Originally posted by @Steven Gesis :
Originally posted by @Ben C.:

I am wondering if anyone can shed some light on their experiences with this type of loan on an investment property (have heard it requires tons of patience)?

Is it true that they require the contractor to begin the job fronting the startup costs himself (trying to put myself in his shoes)?

Also, do you know of any other alternatives to the FHA 203k with the big banks here in NJ?

Thank you!

 Ben, let me help you out keep it simple: (3) Secrets Everyone Needs to know about using a 203k loan for more information on the 203k loan, loan process and how to build the right team for success.

Good luck to you!

 Thank you for your helpful post!

Originally posted by @Ben C. :
Originally posted by @Steven Gesis:
Originally posted by @Ben C.:

I am wondering if anyone can shed some light on their experiences with this type of loan on an investment property (have heard it requires tons of patience)?

Is it true that they require the contractor to begin the job fronting the startup costs himself (trying to put myself in his shoes)?

Also, do you know of any other alternatives to the FHA 203k with the big banks here in NJ?

Thank you!

 Ben, let me help you out keep it simple: (3) Secrets Everyone Needs to know about using a 203k loan for more information on the 203k loan, loan process and how to build the right team for success.

Good luck to you!

 Thank you for your helpful post!

 Awesome happy to help

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