Sometimes when you mention FHA 203K loan program many clients and realtors alike have the idea it is a difficult process. For some lenders, it might, but those who understand, an FHA 203K is the perfect mortgage product to purchase a not so perfect house in Delaware.
Below are 7 things you need to do to get your FHA 203K Loan:
- Contact a qualified FHA 203K Lender and get pre-approved.
- Hire a professional realtor to find you a suitable property.
- Get an appointment with a 203K Consultant. If the project is less than $35K, you may not need a consultant, but our experience has shown they are well worth retaining. The consultant creates a ‘job specification and bid request’. The consultant lists out the repairs and items needed to complete the work needed to repair and get the house ready.
- Get contractor bids. Use the job specification and bid request as your basis for estimates. We suggest using a general contractor who will co-ordinate all facets of the work. Each contractor must be licensed and approved by lender.
- Choose the contractor. Most often your Consultant can provide you a list or you can get your own. Keep in mind the contractor must be licensed and insured. As the buyer, you are not allowed to do your own work, unless you are a licensed contractor and approved by lender.
- Order the appraisal. We the lender, will order a FHA approved appraiser. Once value is completed, we can proceed to close the loan in order for the renovations to begin.
- Contractor will begin the renovations. Once the work begins, there will be several inspections called, draw requests, which will be used as the basis for getting the work completed in a timely manner.