i am in the rehab phase of a 203k right now so feel free to ask me specific questions. dont forget to include closing costs to the amount you need to fund the 203k. this is on top of your 3.5% minimum contribution.
You must have a ton of patience with using a 203k. if you think it sucks now after a couple of days, just you wait...lets hope closing goes according to plan but some cases it doesn't. closing for me was pushed back numerous times by the lender (insanely frustrating).
I am not sure how it works with HUD homes but typically the seller pays your agent's commission. The only items attached to the loan is the purchase price of the property, the rehab, and any fees associated with your HUD consultant. mostly everything else is an upfront out of pocket expense.
@Nino Alfano Definitely keep us posted with your progress. I'm a step or 2 behind you. I made an offer on an REO (SFH 3/1) last week and I'm learning patience. It took a week for them to counter my offer and yesterday I countered them. My agent says I shouldn't expect to hear back until the middle of next week. Judging from the length of time to get an offer accepted and dealing with the slowness of 203k loans, I might get into this house around Christmas. I just don't understand the mentality of the banks. This property has been vacant for 3 years and needs tons of work. Don't they want my money?
any update on your offer?
Here is an update on that house. About Right after the two offers were accepted i was notified the cash offer won. Proceeding that i dove in putting 5 offers on 5 different properties. All of which came back with highest and Best 2 of which i lost and 3 of which haven't heard anything in 10 plus days.
Yesterday my realtor told me that the cash offer on the original house fell through and the bank accepted my offer at 55k.
When i put that offer in it was a owner occupant FHA 203k loan
Now it is no longer a owner occupant. but strictly investor. in the mean time i have stumbled across some cash, so i won't be needed the 203k financing which is nice.
This process is new to me and i am figuring it all out as i go along.
The 203k is not a horrible solution at all. The issue lies within the professionals that you choose to work with. Most lenders do not specialize in renovation and thus it is not handled as a specialty.
I try to post on here when i have time to help answer questions so that you guys can get the right info and not the BS you can get from some lenders and stuff you read on the internet. I cannot tell you how many times I have corrected misinformation.
Good luck with your purchase Nino!
Looking forward to seeing the before and after pictures if it goes through and you can get all the rehab done, congrats for jumping in!
Good luck with this! 203k loans are a great way to get your dream property and still have some equity. I agree with Jeff in that the problems a lot of folks run into can be avoided by working with agents, lenders, and contractors who have experience with the 203k process. Not all professionals have the same set of experience and skills!
@Nino Alfano It took almost a month but we finally agreed on a price. The house is actually owned by the VA and I think they really wanted a vet to buy the property. They have put some conditions on the purchase. I have to close by 9/25 and I cannot get the 203k loan at the same time as the mortgage. This will speed up the closing. Considering the discount and the ARV, I don't mind. I might actually be able to afford the rehab without the 203k. I'll know more when I hear back from my contractor with a quote. At the moment all I can do is wait for my lender to process my paperwork.
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