St. Louis Mortgage Help

Successfully Closing a FHA 203k in 45 days or Sooner

May 18th, 2013 8:09 PM by Bob Rutledge

Yes, it is possible, regardless of your experiences in the past or what you have heard it is possible to close an FHA 203k Renovation Home Loan in 45 days, maybe less.

If you are a home buyer reading blogs, forums, posts, articles, etc., about the FHA 203k renovation mortgages or if you are a Real Estate Agent that has professional experience with other 203k transactions it might seem impossible to close quickly but let me tell you that it is possible and even very likely if you have an experienced FHA 203k renovation team surrounding you.

I hear it all the time, mostly from real estate agents and other loan officers, how hard these loans are and how much time they take, then I ask two very simple questions - 'how experienced was your FHA 203k Renovation Team?' and 'where did you learn all of this?'. The answer always seems to be I don't know and/or the internet.

If you don't know the experience level of your FHA 203k Renovation Team you are only asking for trouble, delays and the risk of the loan never closing period. And just because you found it on the internet doesn't make it true.

The FHA 203k inherently has more paperwork and extra people involved, the extra paperwork and the extra people involved is a recipe that have a terrible outcome leaving a terrible taste in the mouth of someone who has gone through an FHA 203k nightmare. I am here to tell you the risk is well worth the reward. There isn't a better way to buy a home than having the opportunity to get your bathroom, kitchen, or basement redone. How about a new roof, windows, HVAC, addition, expansion, deck, appliances, or just about whatever else you can consider. All of these items can be financed and so much more.

The FHA 203k rehab/renovation mortgage can be done and without much difference than any other mortgage program, including the time to close the key to making it all happen is EXPERIENCE!

To have a successful closing in 45 days or less you need to have 3 experienced components working for you:

  1. LENDER: I am a bit biased, being a Certified FHA 203k Lending Specialist, but I feel that the most important experienced component to having your FHA 203k loan close as quickly as possible all rests with your mortgage loan officer and the lender they work for. If your lender/loan officer doesn't have the experience you will be doomed from the start. Ask your lender/loan officer how many 203k they have closed in the last 12 months, can they do both FHA 203k loan programs, is the processing, underwriting, and draw requests handled in-house? Do they have Contractors they can refer? What hard copy information can they provide, do they have 203k websites, blogs, or articles that proves their experience. Too many lenders/loan officers will 'try' to do a renovation home loan because it was presented to them, this is trouble waiting to happen. Too many only have the Streamline 203k available which is a huge disservice to you. Ask your lender/loan officer if they can do any of the other renovation programs, if they can't or don't know about the other renovation programs there is a good chance they are not experienced enough to be an asset to you.
  2. HUD Consultant: the consultant is a major component of a successful and quick closing FHA 203k mortgage application as they will interact not just with you the home buyer but will be your liaison between you and the contractor, the contractor and the lender and acts in your best interest. To find a HUD Consultant you can go to the HUD website and choose from the many in our state and area. I don't suggest this as I have found in my 15 years of doing FHA 203k loans that the HUD Consultant can make or break your success and there are wide differences in HUD Consultant just as there are with Lenders/Loan Officers. Allow your EXPERIENCED lender/Loan Officer help you choose the perfect HUD Consultant.
  3. General Contractor: HUD/FHA does not have a list of 203k Contractors as there is no OFFICIAL CERTIFICATION for 203k contractors. If there are going to be delays in closing a FHA 203k home loan, even with an experienced Lender/Loan Officer and HUD Consultant, I tell you now it will be because of the Contractor. The contractor in charge of the FHA 203k project will go through a lender vetting process and must be able to prove they have the ability and means to complete your work, plus they will have to have specific licensing and insurances. It is best to have a contractor that has experience with the FHA 203k loan program, but if you have an experienced Lender/ Loan Officer AND an experienced HUD Consultant you may be able to get away with a contractor with no to limited experience. Professional, I have been closing 203k loans since 1998 and I have many contractors that I have worked with multiple times. A good experienced Lender/Loan Officer should be able to refer several contractors to you that are already vetted, have experience with the program, and know the HUD Consultant that is working for you.

If you are interested in taking advantage of the FHA 203k Renovation Mortgage Program or you are a real estate professional with clients who need this home loan do not be deterred by what you read on the internet or hear from others or you will miss out on a  great opportunity. Just remember EXPERIENCE is the key to successfully closing your FHA 203k home loan in 45 days!

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Posted by Bob Rutledge on May 18th, 2013 8:09 PM

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Bob Rutledge Mortgage

Loan Officer NMLS#: 297044

New American Funding 12321 Olive Blvd, ste 150
St. Louis, MO 63141