FHA or private lender

[Robert Medina]

Hello, so i hoping to get some input on a current situation that i am in. So i have a property that I have under  contract. I have 2 options a private lender or fha construction loan. The sale price is 315000. The fha is an fha 203k loan which is a construction loan tied into the home loan. The construction costs are 30000 so the total loan for fha loan is around 345000. The fha cash to close is 20k. The house is uninhabitable at the moment hence why I was looking at fha 203k loan. The private lender is loan is offering a 3 month short term loan to finance the property and all fees and closing costs and then I would be responsible for the construction costs. The private lender is 12 percent interest only with no early payment penalties. It’s a ballon loan so interest is due at the end of 3 months which I was going to roll into the refinance. I plan to refinance out of private loan into conventional after construction. So I would be around $10000 in interest at 3 months. The fha loan requires a minimum of 6 months seasoning before I can refinance and the fha has a high interest rate of 8 percent until I can refinance because I have already locked into a rate a month ago. I’m wondering if the private loan seems to be the better choice. I wouldn’t have to come up with any out of pocket except for construction costs and with the fha I have to use a licensed general contractor for everything which I believe is costing me more money than I would spend hiring contractors that don’t need to be licensed. Most of the work is cosmetic and doesn’t require permits. My fear is not being able to refinance after 3 months and being stuck in private loan. The house has already appraised 100k over buying price so the house will have 20%+ equity arv. Any thoughts?