fha 203k how soon can i sell?

Question

Kunal Mishra · Answer

Tab, 203k is a great plan to start wit has but it comes with its pros and cons.

Cons:

1. Lots of stress through the lending process

2. Documentation over documentations that never ends

3. Getting signs from multiple people , all of which you will have to do.

Pros:

1. Allows you to buy a under priced or foreclosed house

2. Construction costs is provided by lender at a good interest rate

3. HUD Consultant hired for the project (only if your rehab cost is above 35k) helps you overlook the contractors work. This can turn into a con if the hud consultant is not cooperative.

You canot sell the house before 12 months. After that there is no one stopping you.

You can also try to do  a investment 203k but you will have to put down minimum 15% and then you can sell with no limitations.

They will not allow you to do work. If your rehab cost is more than 35k then you need a GC if you can then try to keep it under and you will save a few dollars and will not need a hud consultant.

Lastly try to over budget on some things when submitting the contractors estimatell of you are going above 35k.

Dina Boscio · Answer

My understanding of the work to be preformed is that you need a GC if there is multiple permits and trades that will be working on property. You can hire individual companies to do the work if there is minimal work & permits. As for you doing the work you would have to pass that with the lender. They do require detailed work orders and from insured companies. If you have a company then let them know and see if that works. Please update us on your progress.

Dina Boscio · Answer

Please review the image of the comparison of the 203k & Homestyle loans

FHA.com: In general, FHA loan rules do not restrict the borrower’s ability to freely sell the home. The FHA loan program DOES restrict what an FHA mortgage will buy in such cases--you may not be able to purchase a home with an FHA mortgage unless it has been owned for a certain amount of time and the seller is the owner of record.Dina Boscio: (This would make it hard to flip and sell to FHA Buyer...But there is a work around)

FHA loan rules in HUD 4000.1 state that the lender is required to verify that the seller is indeed the owner, and also to check the date of the owner’s acquisition of the real estateFHA Loan Rules Include a Time Restriction on Transfers of Title                    Check out what HUD 4000.1 says about buying real estate with an FHA mortgage and the lender’s requirement to compare the date of purchase by the current owner versus the date of execution on the sales contract for the FHA mortgage:“FHA defines the seller’s date of acquisition as the date the seller acquired legal ownership of that Property. FHA defines the resale date as the date of execution of the sales contract by all parties intending to finance the Property with an FHA-insured Mortgage.” And that resale date is crucial for loan approval.FHA Appraisal Issues Connected With Resale DatesThere are certain exceptions to the rule you’re about to read, but in general FHA borrowers should know that homes resold 90 days or less after purchase cannot be financed with an FHA mortgage loan.That does not restrict the owner from trying to sell, but it does restrict the borrower who wants to buy. The sale of real estate 91 days after purchase (up to 180 days after purchase) requires a new appraisal if the resale price is 100% or more above the original cost of the property. This required appraisal cannot be charged to the borrower.Dina Boscio: Here is your answer!!!

How long before you can sell your home purchased with an FHA mortgage? The answer is really, whenever you have the need. But depending on circumstances you may find your ability to sell is more limited in the first 90 days of ownership. The FHA takes a dim view on flipping when it comes to single-family home loans, because these mortgages are intended to help people find affordable homes to live in rather than for the purchase of investments.Dina Boscio: If you get a FHA buyer just have the new appraisal done after the 90th day. So timing is every thing if your house is ready for market at 60 days and you get an accepted FHA offer work the buyers inspection and loan process to make sure you have the appraisal dated on day 91 or later. When you purchase your home FHA needs you to have the "INTENT" to live in the property. Your intent to live in the property is your personal business. If life happens and your intent had to change FHA does not go against your need to sell.

Fannie Mae Homestyle Loan (Great for investment property)

 One- to four-unit principal residences , one-unit second homes, or one-unit investment properties, including units in condos, co-ops, and PUDs.  MH is eligible, with the eligible renovation funds capped at the lesser of $50,000 or 50% of the “as completed” appraised value. (Available in DU on March 17.) Any type of renovation or repair is eligible, as long as it is permanently affixed to the property. Renovations should be completed within a twelve-month period from the date the mortgage loan is deliveredHope this helps!

Lisa Weiner · Answer

Tab I would be careful using the words flip and 203k in the same sentence... the banks frown upon that. Look into a Fannie Mae Homestyle Renovation loan. You will need more than 5% down though

Tab B. · Answer

thank you for all the answers!

Tab B. · Answer

ok so i cant sell my house after a year after i do renovations? im not an investor i just want to sell the house. why i cant sell it after a year. also 5% down is fine.

Wayne Brooks · Answer

2 problems, you usually can not do the work yourself, and in your loan application you are stating that you'll owner occupy the property (for at least a year).  203k's are for owner occupied only, not flips.

Kevin Hill · Answer

FHA 203K isn't for investors. Its for owner occupants.