One World Realty in Jacksonville Florida
Charles Gaulden

FHA 203k Loan Renovations Project

  • On a HUD REO property, what does it mean when HUD allows an Escrow Holdback?
    HUD foreclosures generally are not financable As-Is. The HUD appraisal/property condition report will note the major items to be addressed and a very rough estimate of the costs. When HUD allows for an escrow holdback it simply means they will allow the buyer to escrow his/her OWN funds to address the necessary repairs in order to meet FHA minimum property standards. However, the majority of the time there are additional items to address after inspections AND the buyers are better off using either a FHA 203k or Fannie Mae renovation loan to address the property conditions. HUD properties are best addressed on a case-by-case basis to ensure the best solutions are being used.
  • On FHA 203k loans are there different qualifying standards than a typical FHA Loan? No! credit qualifying is the same for any FHA loan with REMN. The only big qualifying difference is the Loan Amount as the buyer must qualify for a higher loan amount with a FHA 203k loan because of the additional repair/improvement monies.
  • What is the maximum amount of work that can be done with a HomePath Renovation loan? There is a $35,000 maximum for cost of renovation on a HomePath Renovation loan. However, both FHA 203k and Fannie Mae Standard renovation loans do NOT have a hard Maximum Repair Amount.
  • If a buyer wants to use a VA loan but the home has WDO damage etc. is there any way to avoid a renovation loan? Yes! REMN offers the HomeFixer Program on ALL loans – including VA. If there are minor repairs items that no do NOT affect the health and safety of the property, the buyer can escrow up to $5,000 of their own funds to address the repairs within 14 days of closing. CLICK HERE for HomeFixer Details.
  • If a buyer wants to use a conventional loan and put 20% down, what happens if the home needs a new roof (ex) in order to obtain financing? We simply treat the transaction as Fannie Mae renovation loan but the buyer can choose to put additional money down. Ex – House is $200,000 but needs a new roof. Buyer gets an estimate for $10,000 for new roof. $210,000 x 20%  = $42,000. The buyer can always pay more down and not finance the repairs, but the Renovation Loan/Appraisal allows the transaction to close despite of the property condition.

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