FHA loan + 203 loan

6 Replies

Im looking to purchase my first property with FHA 203k. My understanding of the FHA 203k loan is that rehab loan portion is included in the whole mortgage upfront. I don't think you can add the rehab portion of the loan on after. I asked my mortgage broker a similar question and his response was that the monthly mortgage payment is based off the total loan, whether you've spent any money on rehab or not.

I don't know if this will answer your specific question, but as @Rebecca Peters  

suggested the 203k loan program has features that include the rehab in the original loan. With that being said you should be able to bypass the "straight FHA" loan and just use the 203k and fully fund the rehab with the same loan.

I'm no expert, just passing along information that I'm familiar with.  I hope this helps.

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It is one loan that includes the purchase of the property and the funds to renovate. There would be no benefit to doing it in the way you have mentioned. 

I've completed two versions of this loan, the FHA and the conventional. Ask away if you have questions.

Thanks Guys!

If I'm paying on the whole loan amount right away then what happens if I don't use all the money attached to 203k?

Also the advantage of taking straight FHA and then 203k is that they are at different rates 3.75% vs. 4.35% I think are the current numbers. But from your answers it doesn't look like it possible to separate them.

I asked the same question to my mortgage broker and he said that any unused rehab money would reduce the principal, but your monthly payment would remain the same. Which means to me that your total mortgage payment time frame will shorten.

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