203(k) Loan Program - Posted by Ben W

Posted by Ben W on March 05, 2000 at 14:17:52:

Thanks for your explanation, Chris. Things are making more sense to me now. I’ve purchased a rental property, and enjoy the rental end of it, but i’ve been exploring the rehab side of investing, and am interested in trying my hand at it a time or two.

An investor i met in passing indicated to me he had used the 203k in a rehab project, and in Carleton Sheets course (not a rehab course, i know!) there is mention of an investor in Michigan who used the 203k on a foreclosure rehab he did.

It seems like it would be a good program for rehab, since it allows for fix up loans and will loan based on an after fixup value. While i don’t currently have a specific property in mind, i’m planning to try one soon, and am trying to look into the financing available beforehand.

Have you worked much with rehab properties? I’m in Albuquerque, NM, and it seems to be done a lot here.

Any starter information you (or anyone) could provide me with would be appreciated.

Thanks,

Ben

203(k) Loan Program - Posted by Ben W

Posted by Ben W on March 04, 2000 at 11:40:25:

I’m looking for information on the 203(k) program–anybody have information, web addresses, or personal experience with this loan?

Does it require owner occupation? What kind of credit requirements are there, and what is their lown criteria? I’m in Albuquerque, NM, and am looking for underwriters that specialize in this program.

Please take a few minutes to help me out!

Thanks!

Re: 203(k) Loan Program - Posted by Anne-ND

Posted by Anne-ND on March 04, 2000 at 16:47:01:

I did a 203K one year ago- it was a great experience. It’s for owner-occupied only. Norwest will handle 203Ks, but good luck finding an agent who will admit to it, you may have to shop around. If you find a lender who specializes in 203Ks you’ll have the best luck. My realtor complained about all the paperwork, but it was no big deal.

Re: 203(k) Loan Program - Posted by Chris

Posted by Chris on March 04, 2000 at 12:45:38:

Title 1 may be of interest to you-

http://www.hud.gov/hoc/sna/snatitle.html

Re: 203(k) Loan Program - Posted by Chris

Posted by Chris on March 04, 2000 at 12:40:23:

No Investors

Go to-

http://www.hud.gov/hoc/sna/snat203k.html

Re: 203(k) Loan Program - Posted by Ben W

Posted by Ben W on March 04, 2000 at 13:08:25:

Chris-

This was on the link you sent me:

“Borrower’s Equity: If the loan is over $15,000 and the property is not owner-occupied, the borrower must have equity in the property equal to the loan amount.”

If a property is not owner occupied, it would have to be an investor owned property, wouldn’t it?

Is Title 1 under the 203(k) for investors?

Re: 203(k) Loan Program - Posted by Dewey (NJ)

Posted by Dewey (NJ) on March 04, 2000 at 15:52:42:

I did an investor 203K several years ago. I believe the info you read is probably outdated because they used to allow non owner occupied but there supposedly was a great deal of fraud going on and they now limit it to owner occupied only. Regardless, the paperwork and loan costs were so extreme that I would not have done another one anyway.

Re: It’s all the Clinton’s fault… - Posted by Chris

Posted by Chris on March 04, 2000 at 13:44:34:

It’s that darn Bill and Hillary doing it to us again!

That’s Uncle Sam for you. Title 1 can be investor, but 203K cannot although you can use a Title 1 with a 203K.

203K and Title 1 are seperate. If it is not owner-occupied that does not mean it is investor by default=

203K: HUD-FHA insures rehabilitation loans for owner-occupants, municipalities and non-profit housing providers to (1) finance rehabilitation of an existing property; (2) finance rehabilitation and refinancing of the outstanding mortgage of a property; and (3) finance purchase and rehabilitation of a property.

What are you planning on doing-buying a junker and rehabbing it? If you repost with a more specific idea of your plans it will help to guide you to the plan most suitable for your situation.

P.S. I just added all that stuff about the Clintons because I know it raises the blood pressure around this site. If you like the Clintons I apologize, if you do not I feel your pain.;-}

-Chris

Re: 203(k) Loan Program - Posted by Ben W

Posted by Ben W on March 05, 2000 at 14:07:57:

That explains a lot, because i’ve heard of several investors who have used the 230k for investment property, although i don’t know when it was. It must have been before it became owner occupied only~!

Thanks for your answer!