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Updated over 7 years ago on . Most recent reply

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1
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Sherrod Wesley
  • Real Estate Agent
  • Jacksonville, FL
1
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16
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Purchasing using fha 203k loan

Sherrod Wesley
  • Real Estate Agent
  • Jacksonville, FL
Posted

Really interesting in using a fha 203k loan for my first property in Jacksonville fl . I want to learn as much as I can about it and I was wondering if anyone had any experience in using that type of loan and would you recommend it

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83
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45
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Allyssa Compton
  • Real Estate Agent
  • Rockland County NY & Northern NJ
45
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83
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Allyssa Compton
  • Real Estate Agent
  • Rockland County NY & Northern NJ
Replied

Hi @Sherrod Wesley

There is a lot of great information online about the 203k loan and you should definitely look up some state-specific information as each state tends to put their own twists on this. 

A few things to note that I've come across in my experience that you may not find online:

1. You will definitely need to speak to contractors prior to obtaining this loan to be sure that they are willing to work with you on this. They need to be familiar with the 203k process and not underbid as this can compromise the entire loan. Many contractors are unwilling to work with 203k loans because there are a great number of stipulations and a lot of paperwork for them to get paid. 

2. The project must be completed in 6 months. This may vary depending on your situation and you can get extensions but the more you adapt, the more paperwork must be done. 

3. It can be hard to find a lender but when you do find one - be sure that you aren't getting taken advantage of. Just because they are one of the few around who will offer this loan doesn't mean you should pay an extreme amount for it. Yes, the 203k will usually cost 1-2% more than a conventional loan but if you are getting into hard money lending rates, you're getting taken advantage of. 

Look into other options available to you. It may make more sense to do a BRRR strategy with private money, depending on your situation. At the end of the day, do your research, and go for it.

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