203k building permits not approved

[Whitney Moore]

Recently closed on a 203k loan. We are in the process now of getting the building permits but have to apply for a variance for our property. Most of the variances get approved but some do not. My question does anyone know what happens with your loan if the city does not approve the permit? Do we have to talk with our bank? Are we stuck with a house we can’t do anything with? Any advice would help me!!

[Tim G.]

Its likely they won't release the funds for the repair work. It could grenade the renovation repair funding side of your deal. They would simply take those funds and apply it to your mortgage instead of releasing it to you. 

Having proper permits approved by the city is a key element to the FHA203K loan, I am speculating based on my experience with them and it would be best you speak to your lender and the individuals in charge of managing your loan and renovation at your lender.