Question about a short sale, 203k loan and what a RE agent told .

[Chris Tom]

Good morning all. Me and my wife and currently looking for homes In the ny/longisland area. We have seen some that are short sale and wanted to bid on one. Being that it's a short sale there was really no kitchen we need all the appliances and some rooms need some touch ups. Now I researched rehab mortgages. I looked up and found that u can get a 203k mortagage to fix up and rehab a home and live in it or sell it. So I asked my agent yesterday and they called their mortage person and I was told I couldn't do 203k loans on short sales. I did a lot of research and I see that u can so why are they telling me I can do that? Any information would be great thank you.

[Kevin Walton]

I’m a 203k lender. If the property doesn’t need structural repair than the loan can close in the same amount of time as a conventional loan. If there’s structural repair tack on 7 days.
No homeowner facing a short sale should cave into the cash deal unless they have less than 20 days. It’s quick commission but doesn’t do the seller any good, they lose their rear end as well as the lender plus it kills values which hurts people trying to refi in the area. You’ll get a higher bid and make everyone happier accepting an offer with a 203k buyer who has their transaction structured properly.
A properly structured 203k has a HUD inspection upfront (a feasibility study), a 203k familiar contractor job bid all before the buyer makes an offer for the property. This way you can add the property defects and costs to cure to the remodeling projects into one lump sum amount. You don't want surprises later.
Most Realtors want to use their handyman to do the work. This won’t work since the contractor is forced to float monies when working with this loan. That’s why only specific well financed contractors can work with this loan. 75% of all problems on the 203k have to do with the contractor. The right contractor makes all the difference.
If the property needs corrected health and safety items such as replaced gutters or repaired dry wrought it’s because a trained construction expert or appraiser knows it’s necessary to protect the buyer’s and lender’s interest.
It's no more difficult for the borrower to qualify for a 203k loan either, it's an FHA loan.
Any Realtor who says you can’t use a 203k to buy a short sale is wrong.
Like most Realtors, they don’t understand the loan so they stay away from it and tell their clients the same.
This is a shame since there are 203k classes out there for Realtors to learn how it works, I teach one. If more took the class, they would see that there’s nothing to be afraid of.

Find a 203k lender that offers both the 203k Streamline and the 203k Standard loan and make an offer on that property. Also along with the offer write a letter as to what remodeling you are to do with the property, along with the contractor bids and present it.
It’ll show you’ve done some due diligence and understand what you’re getting into.
If your Realtor trys to persuade you not to do this, get another Realtor.
Best of luck to you.