All Forum Posts by: Emma Powlin

@Emma Powlin

Any contractor can give estimates for remodeling, but does the contractor know/understand the unique paperwork, compensation structure, draw request process, change order process, allowable items, required items, etc.? 

There are certain things that can be remodeled on a 203k that are not allowed on the Homestyle and ChoiceRenovation and vice versa. 

Loan limits are also different. 

Down payments are also different. 

Mortgage Insurance is also different. 

Main similarity is that all 3 allow the borrower to include rehab money in to the loan.

I would recommend using contractors that have earned the accreditation as a Certified 203k Contractor. Or get these 2 contractors certified. 

Otherwise, your contractor is just winging it and hoping for the best. You're only as strong as your weakest link ... select your partners wisely.

Do you already have the WWU from the HUD approved FHA 203k Consultant that identifies all the items that are required to be remodeled?

@Emma Powlin

You can do a conventional version of the 203k. 

Fannie Mae Homestyle or Freddie Mac CHOICERenovation.

You'll still use the same Certified 203k Contractors for the conventional versions. 

Have your lender give you a Loan Estimate (LE) for all 3 to see which one works best for you. 

Better hurry because you have a lot to get done during your inspection/feasibility period. 

Hi @Emma Powlin congrats on taking action and going for a house hack! A couple simple things would be increasing your earnest money deposit amount and moving your closing date up as soon as would be realistic for you bank (talk to them and see what is possible in a best case scenario). 

Some outside the box ideas would be to maybe play around with the inspection threshold amount. Traditionally this amount is $1500, but I've had success with my clients raising it to $3000 or $5000. This will usually give you a leg up against similar offers with financing. As a first time home buyer, I don't like recommending to eliminate the inspection contingency, but depending on the age of the home it could be an option.

If you've got a little bit of extra money to play with over the 3.5% you might want to consider adding an appraisal gap coverage clause. Basically what this would mean is if the house did not appraise for the contracted amount you would cover the difference. You can specify how much of a difference you would cover as well if you have a limited supply of funds. This is especially good in competing with cash offers. The benefit to cash is security, so putting a clause like this in provides a similar level of security to the seller. 

The biggest thing to remind yourself is to have patience. Unfortunately there is no magic wand you can wave to make this happen. Sometimes you will lose in multiple offers, that's just the reality of being an FHA loan and a first time home buyer. But your not the first person who's done a deal FHA and you certainly won't be the last. So stick with it and you'll be in your first house hack in no time!

Might want to look at the HUD Site for your area. It gives more preference for non-cash buyers. If you are competing against cash offers then purchase price is really all you can do besides waiving inspections but I don't really recommend that. You will take an initial loss but there will be a point where it doesn't make sense for the cash buyer.