The FHA 203K Rehab Option

By
Real Estate Agent with Zenith Realty

The FHA 203K Rehab Option

The FHA 203K is a loan that lets the buyer finance the cost of the purchase of a property along with desired or needed improvements.

Additionally, where necessary, the loan can include the cost of renting another place while the property is being renovated.

With this type of financing, the buyer has more options in finding the home that truly meets their desires since it opens up the market of less than perfect homes to their list of possibilities.

By using this method of purchasing a home, the buyer can assure that rooms such as the kitchen or the bathrooms are done to their liking.

The home pictured below is an example of a home which could use the FHA 203K loan.

The particular home, located in Parkville, Maryland is available.

 

This home needs a roof.  It would be covered by the FHA 203K loan.

Additionally, the exterior could be painted or vinyl sided to make it more attractive.  This would be covered by the loan.

The living room needs to have the floors and walls refinished.  The buyer could refinish the existing floors, replace them with new hardwoods, or have them carpeted.  Any of these options would be covered by the loan.

The fireplace could be cleaned including the flue and it would be covered by the loan.

The floors in the spacious kitchen, the counter tops, and cabinets could all be replaced.  Once again, it would be covered by the loan.

 

Of course, the finished product would have to appraise, but since the house needs work, it would sell for a lower price to start.

 

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Rainer
214,236
Kathryn Sparks
Zenith Realty - Baltimore, MD

Ron,

Several of my clients have successfully used the FHA 203K loan.  It does open up some new options.

October 03, 2011 06:45 PM #1
Rainer
196,196
Karen Krzniak
Zenith Realty - Towson, MD

Ron,

The 203K does have a few extra steps, obviously, but with an experienced team of real estate agent and lender, it can be relatively easy.

 

October 03, 2011 06:49 PM #2
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

Kathryn,

In many cases it can be much faster than a short sale.

October 03, 2011 06:53 PM #3
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

Karen,

As is the case with many real estate transactions, experience is always worthwhile.

October 03, 2011 06:54 PM #4
Rainmaker
797,218
David Spencer
Keller Williams Team Realty - Bloomingdale, IL
Chicago Area Commercial-Residential R.E.

Feasible option to a foreclosure sold as is.

October 03, 2011 08:41 PM #5
Rainmaker
875,488
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

One of my favorite products, doing at least one per week. I know they are more work, but it bring my steady traffic.

October 03, 2011 09:28 PM #6
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

David,

I agree, it is a very viable option for as is foreclosures.

October 04, 2011 01:52 PM #7
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

Joe,

Once you do a few, they almost become as easy as most other loans, just with a little more work.

October 04, 2011 01:54 PM #8
Anonymous
Anonymous
Vito Simone

I could not agree more. I have been a Broker/Owner of my own rela estate company foor 20+ years until recently and have always used the 203k product to help people buy houses. Now I do 203k Consulting 100% of the time and really enjoy helping people more directly with the process and helping Realtors learnhow to use the FHA 203k as a tool.

October 05, 2011 09:48 AM #9
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

Vito,

I will keep you in mind for the consulting.

October 05, 2011 03:25 PM #10
Rainer
214,236
Kathryn Sparks
Zenith Realty - Baltimore, MD

Ron,

A short sale coupled with an FHA 203K may take a year or more.

October 21, 2011 12:43 PM #11
Rainmaker
565,707
Ron Trzcinski
Zenith Realty - Nottingham, MD

Kathy,

I hope that these buyers have somewhere else to live in the mean time.

October 21, 2011 12:49 PM #12
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Rainmaker
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Ron Trzcinski

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