What happens after 203K closing?

Question

I am a first time home buyer who is trying to purchase a SF using the 203K loan. I wanted to know if its best, or if it makes a difference, to go with a lender that will stay with you through the whole project (meaning until your rehab/renovation is completed) or sells your loan after closing? I don't see much discussion on this and was wondering. Any feedback is greatly appreciated.

Erin M. · Answer

Account Closed Have you had any luck with the FHA 203K loan experience?  I am also located in Chicago and I'm thinking about utilizing this type of loan to rehab a multi-unit building.   Have you worked with and FHA loan approved contractors?  If so, what has your experience been like?

Roberto Torres · Answer

Account Closed  My 203k loan has been sold and the people who are still managing the process is the original bank who made me the loan. Ask ur lenders if this is the case because the ones who are inspecting and giving money to the contractor is the original bank although my loan has already been sold. Hope it helps.

John Warren · Answer

Account Closed it shouldn't make a difference to you in the long run. The most important thing is to have a contractor who can deal with the renovation loan process. It is a real headache from the contractor's point of view! Also, try to keep your loan a "stream line" loan if you can!

Account Closed · Answer

Thanks John. The 203k Streamline is not suitable for the area I am looking in. The properties are complete gut rehabs. Its also the most affordable route to go right now if you want decent affordable property in Chicago.

Michael Facchini · Answer

I would say there is a slight advantage to working with a lender that holds the loan during rehab vs transferring it to a different servicer.  If you choose a lender upfront because you like how they operate, then wouldn't you want the assurance of a similar experience post-closing?

Jennifer Barlow · Answer

My suggestion would be - to understand the whole process from A to Z ,before comitting . Also please be prepared to hear negative opinions about these . If all they are saying is ,never do 203k , then ignore. But if they are offering any rationale ,then I would suggest to pay more attention

Also 203K is more restrictive than homestyle. If you have good credit then homestyle is flexible. In either case, the biggest chllaenges we be in this order

1. Finding contrcator

2. Finding lender

3. Educating yourself and organizing

wish you good luck

Wayne Brooks · Answer

No difference....the most important thing is a lender with Plenty of 203k experience, and a good contractor.