Is the FHA 203k loan program actually difficult?

[Ashley Huff]

My fiance and I are trying to purchase our first home and get in the REI game. We have been on the "funding/financial" step for a solid 3 months now, trying to figure out what we can afford. Our expectation is to do a live-in flip. We've been exploring options from conventional loans to hard money lenders - everything in between and around. The strategy that sticks out the most to us is the 203k loan, and we've been trying to work with a couple of lenders who supposedly offer FHA programs.

Simply put, we're wondering exactly how difficult it is to make a deal with a 203k Loan. Its quite possibly the best option out there for us. We plan to live in the home for more than a year (it will be our primary residence), and we love the idea of this loan because it gives us an ample amount of time to learn about construction and the market all while working on the property. 

However, it seems a lot of lenders who advertise offering FHA loans are put off by the difficulty of finding a contractor(s) willing to work around 203k loan contingencies and guidelines. Lenders seem to be more scared of the loan than the client!

Really, any info would be highly appreciated. We are incredibly tired of being stagnant and we want to move forward (a.k.a. BY A HOUSE). If I need to answer any questions to help clarify or give more depth to this subject, I'd be happy to accommodate.