FHA’s 203K Pitfalls

 

FHA’s 203(k) renovation loan has grown in popularity the last few years because of all the residential foreclosures and depressed properties. Every lender in the book is now trying to take advantage of the huge demand but, the problem is, that the 203K learning curve is pretty severe. This is not the loan product you want to give to just any lender.

 

You should search out a lender that has already gone through the lumps and bumps. When researching the right lender ask the following questions:

 

• How many 203(k’s) have they closed in the past year?

• Do they originate and service the Contractors Draw process?

• Who do they use as the FHA 203k Consultant?

• How long does the process take from application to closing?

 

As a 203(k) Consultant, we recommend contacting a 203(k) Consultant before contacting the lender. The Consultant knows the whole program and can guide you in the right direction. The right lender with the right team behind them will be able to slam dunk this loan just like any other loan.  Experience counts here just as it does in any other field.  Drama during the loan process is not a good thing so; research your lender and 203k Consultant to make sure they are the one you want to do business with.  The right team should be able to close this loan in 30 to 45 days.  With 203k, there is a right way and a wrong way.