FHA 203K – The Self Help Dilemma
When you close as many FHA 203K loans as I do you encounter almost every question. However, I get one more than others; Can I do my own renovations via “self help”?
I’m trained, I know how to paint, I was a carpenter in college, I’ve been doing this for years. I’ve heard all the reasons as to why homeowners should be able to complete their own renovations. I sympathize, I really do. I want you to be responsible for renovating your own house. However, today I want you to realize why 203K Self Help presents a problem, why underwriters don’t want you to try and why many FHA 203k lenders don’t allow it.
There are a couple of valid and pertinent reasons why underwriting has a problem with you doing your own renovations and why FHA 203K self help is against the rules at many lenders.
First reason is the checks go to the contractor and they don’t want them in your hands. Putting thousands of dollars into the hands of homeowners for repairs yet to be completed is a recipe for disaster. While you may be honest, some people are not. The viability of the program depends on qualified contractors doing the repairs as FHA specified. That is why contractors go through a serious vetting process and don’t get the second half of their money until the renovations have been signed off on by the homeowner and the appraiser.
The second reason is for the contractors out there. FHA wants you working and earning money so you can pay for your new FHA 203K mortgage. If you are busy renovating your own house are you working and earning money? No, you’re not. But Jonathan, I’ll do it in the evening after work and on the weekends. Again no, they want the renovations done and done fast. They don’t want you working nights and evenings to complete your renovations that could have been completed in less than a month by a full time crew. FHA wants your 203K loan done and you living in that home inside of 30 days. Why? Because they don’t want you paying two housing payments. They don’t want your house back.
Homeowners, we love you, we really do. We understand you’re handy, we understand your creative, but we want you to understand we’re lending you hundreds of thousands of dollars on a loan based on your home repairs being done quickly and with quality. I know you’d like to do the work yourself, but you can’t and we hope you understand.
APPLY FOR YOUR FHA 203K LOAN NOW!
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Jonathan Blackwell
FHA 203K Renovation Specialist
Hometown Lenders
Atlanta, Georgia, 30317
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Work: 404-551-3845
Mobile: 404-519-5383
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[...] A: Sometimes. On very simple renovations with a low dollar amount you may be allowed to do the work yourself. However, on any substantial renovation we will require a General Contractor. You can read more HERE [...]
[...] A: Sometimes. On very simple renovations with a low dollar amount you may be allowed to do the work yourself. However, on any substantial 203K renovation we will require a General Contractor. You can read more HERE [...]