All Forum Posts by: Bill Rich

As Chris mentioned there is no flexibility with FHA. It's black and white how MIP comes off. If you put less than 10% down MIP is for the entire term of the loan, no exceptions at all. If you put 10% or more down its come off in 11 years.

Hello everyone, 

House hacking is becoming a new trend that's proven to be a successful tool in increasing the profitability of a home from a live-in investors perspective. I have experience with 203ks nationwide and would be happy to answer any questions you may have. The biggest piece of advice I would give is to utilize the $10,000 towards your down payment and rely on the 203K to fix up and buy the property. Your dollar will go much further. 

Good Luck! 

Hey Guys

I can speak from the perspective of a lender who does a lot of 203K's and 203B FHA loans. Both loans are great loans and each have a lot of benefit to offer. From my perspective, the 203K is not a difficult loan to do if you are working with the right lender. You want to make sure the lender that you are working with has expertise in this program. It is the lender who "offers" the 203K but does not really know the ins and outs where the difficulties come into play hence everyone saying its more difficult to complete. The 203B FHA loan is a great one if the home does not need any work down to it and you are just looking to get into a home with little money down. If you are buying a multi-family property you can use the rental income from the other units as well to help you qualify. There is a lot of information on the internet some good but most bad so if you have any specific questions about these programs please feel free to ask.

@Ken Mackey

Hi Ken 

In order to really answer that question there are several key pieces of information missing. I specialize in the FHA 203K renovation mortgage and when a client asks me how much they could possibly sell it for in a year or so I always first ask are you planning to live in the home during that first year. The reason I ask that question is to ensure the buyer will qualify for the 203k since you are required to live in home as your primary residence. When people ask about selling right away or in an abbreviated time frame it could indicate the home could possibly be an investment property which, if that is the case a 203K would not work. If the home was going to be an investment property then you could turn to the Fannie Mae HomeStyle renovation mortgage which allows for vacation homes and rental homes. The other key piece of information needed would be the location in which you are buying. Real estate values can do a 180 depending on location. The old saying "location, location, location" really does hold true. A home in one neighborhood could be worth one figure while that same type of property in a different neighborhood could be completely different.

I hope this helps so far. 

@James Rodgers

203K's are the perfect loan for what you are attempting to do.  Having worked on many a 203K in my career I can tell you as @Greg H. mentioned you want to make sure you have a team in place who is familiar with the process and understands how to administer the 203K.  It is not a loan that any old lender can do.  I cannot speak to the local codes though as to what you can do with the rooms.  If you have any questions about the 203K process please feel free to ask.

Hi Tyler

Have you considered using the Fannie HomeStyle Renovation Mortgage as a financing engine for your investment venture?  There are many benefits to using this loan and we will list those below- however please keep in mind that a licensed mortgage originator should do a full analysis to see which renovation product is right for you and your family.

Here are some highlights of the Fannie Mae Homestyle Renovation Mortgage:

• Perform almost any type of improvement or repair including luxury items
• Improvements and repairs can go up to 50% of the after improved value
• Primary residences, second homes and investment properties
• One- to four-unit homes, condominiums, and PUDS
• 30 year fixed rate mortgages
• As little as 5% down
• No mortgage insurance for loans with 20% equity
• Reduced mortgage insurance for loans with less than 20% equity versus a 203k
• Additions and second levels
• Swimming pool
• Exterior spa or sauna
• Built in BBQ island and outdoor kitchen
• Built in outdoor fireplace
• Tennis courts
• Generator
• and really anything else you can think of!

Hi Michael

I do concur that these figures do seem pretty high but it is hard to really determine that without knowing all the quirks of the home. One thing I want to point out is that you mentioned you were doing an FHA 203K or Fannie Mae HomeStyle Renovation Mortgage. Using these programs is a smart move because it requires the use of a HUD consultant as well and the consultant can guide you on the pricing and whether it is high for the properties demands. You want to make sure that your lender sets you up with a reliable consultant who knows the area. Having a reliable and knowledgeable consultant will help to ensure that the post-closing (renovation phase) goes smoothly.

Hi Jon B

The Fannie Mae Homestyle Renovation is the conventional counterpart to the FHA 203K Renovation Mortgage and this loan, based upon your situation, might be another option to help you buy or refinance and renovate you home. There are many benefits to using this loan and we will list those below- however please keep in mind that a licensed mortgage originator in your state should do a full analysis to see which renovation product is right for you and your family.

Here are some highlights of the Fannie Mae Homestyle Renovation Mortgage:

• Perform almost any type of improvement or repair including luxury items
• Improvements and repairs can go up to 50% of the after improved value
• Primary residences, second homes and investment properties
• One- to four-unit homes, condominiums, and PUDS
• 30 year fixed rate mortgages
• As little as 5% down
• No mortgage insurance for loans with 20% equity
• Reduced mortgage insurance for loans with less than 20% equity versus a 203k
• High balance loans depending on your county
• Additions and second levels
• Swimming pool
• Exterior spa or sauna
• Built in BBQ island and outdoor kitchen
• Built in outdoor fireplace
• Tennis courts
• Generator
• and really anything else you can think of!

Hi Michael

A 203K is only designed to be a renovation mortgage that allows you to either buy the home and finance needed repairs or if you already own the home it would be a rate/term refinance where your renovation funds are used to make the repairs that you desire. The funds are not given to you directly, they are held in escrow and paid to the contractor as repairs are completed.  The deadline for the repairs to be completed is 6 months.  I would be happy to walk through any other questions you have.  PM me and we can setup a time to talk. 

Thank you

Hi Derrick

I am a 203K lender and would be happy to help you.  Please private message me and I we can arrange a call to go over your goals. 

Thank you!