All Forum Posts by: Jeff Onofrio

Yes I am confused as well. If this is your primary residence than yes an FHA 203k will work and as Erik said you will need to have a general contractor on the job.

I would recommend getting a good HUD consultant who will be able to advise on the issues you are seeing and from what I see it looks like a structural engineer is going to be a good investment on your part.

If this is a flip for which you do not intend to live than you should look at another financing option as FHA and FHA 203k are for primary only.

@Arthur Banks - you said it best.  Your lender needs to have experience. While it is important to have an experienced contractor the lender can train any contractor if they know what they are doing.  FHA 203k and renovation loans are all I do at my company and the truth is they do not need to be as hard as they are but you need to do your DD on the people involved in your transaction and there levels of experience.  

I am personally planning to take the time to write more often about these products so that other BP members do not have to go through this same type of troubles.  

The FHA 203k loan is a great product and can really do a lot of good when done correctly.

Congrats! 

Hi Corey-

I would like to clear up the information above on the FHA 203k program. You are correct that it is for owner occupied only but that does not mean an investor could not buy the property and live in one unit while renting out the others. I have had many clients do this and creat positive cash flow. It does not say anywhere that after a year or two you could not refinance this property into a conventional loan and do it again. If someone is looking to buck the system- than YES- no need apply but for an investor who is looking to get started and has the ability to live in the property it is a great low down payment option.

As far as the expense- yes it is expensive but its cheaper than hard money by a long shot and it has low down payment 3.5% of the acquisition and renovation and rates are in the mid 4's. The fees are much lower than what you stated above and they are financeable- that is a very attractive option to the savy investor.

Using the 203k I have helped many clients also gain 20,30,40, 50 as much as 100K in instant equity- there are not many options out there that can offer these features.

I just wanted everyone to understand the program and what it can truly do.

Good luck to all! - Jeff

as long as you plan on occupying 1 of the units as your primary then yes 100% the FHA 203k is a great option. I have helped many people in your state with K's specifically because of the title V issue. But it must be your primary.

The 203k is a more pricey option but it gives you flexibility and @JOAN DICKIE - you can actually go to 110% of after improved value to qualify. There are conventional renovation programs available as well. That program is called Homestyle and allows for primary purchases to 95% LTV. You can also do second homes and investment properties. Hope this helps. I run the reno program for my company so I do these everyday- not a sales pitch but working with a broker is usaully half the issue- they have zero control of the transaction. Good luck and please let me know if I can help answer any questions. Find mortgage reps who focus on renovation is the key!

Good luck John and if you need help we have 2 branches of my company down there and I could put you in touch.

Most if not all lenders will not allow "self help" anymore. Its highly frowned upon as FHA 203k loans have strict guidelines that the work must be completed within 6 months and most "self help" do not get done on time.

Also any contractor doing work on a 203k poroject must be properly licensed and insured. Good luck!

Hi John-

I am a BP member but I am also a lender and I specialize in the FHA 203k. 203k's can be a little but work but using them in the right situation can be a home run for you. I have had dozens of clients who bought homes correctly- below value- and added work the the projects and at closing there homes had anywhere from 10K to as much as 120K in instant equity. It doesn't happen all the time but it does happen.

FHA does not want to see that you are using its programs "to acquire properties"- basically saying they do not want you to use this to build your portfolio but if done correctly it is a great option for individuals looking for a low down payment way to start investing for there future.

I always say to my clients that had I know about this product when I was young I would have amasses a lot of properties and used it to its potential.

Good luck and feel free to PM me for any advice about you specific situation. If you do go this route just make sure you work with a lender who specializes in these programs or you can get taken for a ride.

Thank you James and Brandon! I appreciate it!

Still available? If so I would like to know more.

Jeff Onofrio - Marlton, NJ