203k Loan Experiences

[Cole Britting]

Hi everyone,

What are people's thoughts and experience with the 203k loan? Were you happy with the work of the contractors and the overall process?

A few more technical questions. Can you live in the house during the rehab? When do the payments start, after the rehab is finished or before it starts? 

I would love to hear what you guys think about this type of loan. I feel like even with its drawbacks it can be very powerful for a house hacker looking to add some value without having to come up with the rehab costs in some other way.

Thanks!

[Paul Welden]

@Cole Britting Yes you can live in the property during rehab but depends on the extent of the rehab and your agreement with the Certified 203k Contractor. If the rehab will gut the kitchen or leave you without a working bathroom, the property may not be livable during rehab. 

Mortgage payments start 30-45 days after the loan closes ... you will be paying the mortgage during the rehab, but on the Standard 203k, you can include up to 6 months of mortgage payments (PITI) into the 203k.

Most of the drawbacks are associated with working with the wrong lender and wrong contractor. 

So, select the lender based on their verified 203k experience and use a contractor with the designation as a Certified 203k Contractor - 203kContractors.com.  

You're only as strong as your weakest link --- select your partners wisely.