An associate blogger from North Oaks, Minnesota posted the following on his blog today and I’d like to share it with you.
Paul Lesieur said
I am often asked by prospective homebuyers and Realtors what this loan is about.
In a nutshell
1st. Its a loan and yes you need to pay it back.
2nd. You need to qualify like any other loan. A 640 credit score gets you in the game.
3rd. You can use this loan to buy and remodel a home.
4th. The loan amount is determined by the purchase price and the cost of repairs as set by the minimum requirements of the FHA that is determined by the consultant or lender.
5th. You can get the 203k as a 30, 15 or 3/1 or 5/1 ARM.
6th. For rehab and remodel you need a licensed contractor, few lenders will allow homeowners to do the work.
The 203k loan is perfect for purchasing any home, it doesn’t have to need work, its just a loan. But, if you want to buy an REO or properties needing work it may be your only choice.
In a nutshell, the 203k is most widely used by first time homebuyers to purchase and update a property that needs some help. At its best you can purchase and remodel and have 10% or more equity the day you move in.
Is it a difficult loan to process?
Not if you work with experienced 203k people.
So, whats wrong with that?
If you would like more information on this type of loan in the Seattle area, just give me a call.
Do you see many of these loans in your sales? I’ve been thinking about becoming a HUD 203k Consultant.
Aaron, I think there should be more of these types of loans. It seems to me to be mostly that agents don’t suggest them, so buyers don’t know about them. I wish there was more publicity about them and some derelict properties would get cleaned up.