I have pre approvals for a 203k and a regular fha

[Kiara Washington]

This is my first purchase (finally) I know that if I use the 203k I'll have a lot of HELOC available to pull out for a second property. But I'm not able to use the first time homebuyers grant. My question is if I was to go for a regular fha for my first property can I still use a 203k for a second one or would I have to refinance my first into a conventional loan.

[John Warren]

@Kiara Washington you should speak to a good lender to get these kinds of questions answered. The rules change constantly on this, and I always refer my clients right back to the lender for these types of questions. You should also look into the 5% down conventional loan for up to 4 units. It sounds more expensive, but often ends up being a much better loan product. 

The 203k loan is everyone's favorite loan here on BP, but it is a tough loan to pull off. You must have a GC, which means your rehab costs will be higher than if you paid out of pocket. This often times means that you end up over paying for everything and not really having any equity to "BRRR".

203k loans are also tougher loans to close as there are additional hoops to jump through. I have closed only one of the three 203k transactions where I represented the buyer this year. One deal closed, one fell apart, and the last one the buyer walked because the rehab was so much that he didn't feel comfortable that he would get his money back through a refi or HELOC.