Author Topic: 203K  (Read 2548 times)

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Offline akim997

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203K
« on: March 05, 2012, 11:49:43 PM »
Does anyone have any experience in utilizing a 203K loan?   Looking at buying a home that needs some fixing, but after the downpayment, we wont have the cash to do everything we want with the home.   wells fargo has a "buy and renovate" program, but i didnt want to call without checking what these types of programs are like. 

Offline Soylent Green Is People

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Re: 203K
« Reply #1 on: March 06, 2012, 09:12:54 AM »
203k loans tend to be expensive due to their complexity and lack of re-sale ability relative to a standard FHA transaction. Wells Fargo's program does offer some benefits relative to the FHA 203k, but be ready for a long escrow given WF's turn times for this product.

If you're going to close FHA, better hurry up. Come 4/1/2012 the FHA Up Front MIP increases to 1.75 from 1.0, and the monthly MMI goes from 1.15 to 1.25 or higher if your loan is over the standard Conforming loan limit. Don't know what the 203k MIP and MMI might be so check with someone who does these loans on a monthly basis.

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Offline akim997

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Re: 203K
« Reply #2 on: March 06, 2012, 09:53:25 AM »
thanks for the reply.   this is putting a damper on the plan.   may need to find FCB financing...    ill call WF today to get more details.   

Offline IrvineRealtor

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Re: 203K
« Reply #3 on: March 06, 2012, 10:34:22 AM »
thanks for the reply.   this is putting a damper on the plan.   may need to find FCB financing...    ill call WF today to get more details.   

akim - I can send you the contact from another agent out of my office. She specializes out in Silverado and often works with 203K loans (I don't, unfortunately). 
-IR2
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Offline freedomcm

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Re: 203K
« Reply #4 on: March 06, 2012, 11:48:04 AM »
I recall reading that if you use 203K, you must use bank approved contractors and cannot do any of the work yourself.

Is that true?

Offline IrvineRealtor

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Re: 203K
« Reply #5 on: March 06, 2012, 12:05:49 PM »
I recall reading that if you use 203K, you must use bank approved contractors and cannot do any of the work yourself.

Is that true?

To my (limited) understanding:
1. The lender is the one that sends out the physical inspector for the home, who approves the estimated dollar amount that is needed for the home, within the loan.
2. The buyer then gets bids from vendors/contractors, who must also be approved by the lender.

These are difficult loans, and not the right fit for everyone.
-IR2
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Offline rkp

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Re: 203K
« Reply #6 on: March 06, 2012, 01:37:21 PM »
akim - is this an investment or for you to live in?  if you found a good fixer upper and want to fix and resell, there are plenty of folks with cash looking to get a decent return. 

Offline Soylent Green Is People

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Re: 203K
« Reply #7 on: March 06, 2012, 02:04:36 PM »
There's a 203k "lite" - $35k max cash - and a full 203k. If you take the $35k the contractor restrictions are pretty easy. Can't be an "owner / contractor" in either case. No DIY projects.

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Offline akim997

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Re: 203K
« Reply #8 on: March 06, 2012, 07:10:49 PM »
thanks for all the responses.   yes, this would be a primary house for us to live in, not a flip/investment property. 

@IR2- thanks for the pm, ill reach out to your contact.   

hmm... 203K lite?  not interested.  the property is substantially below are budget and we'd like to do a lot of remodeling.   however, the cash we have wouldnt go "all the way" in terms of what we want to do.   i've located some alternative financing options that we are going to explore if this type of loan ends up being too much work... 


 

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