FHA 203K loans require a little more coordination than a traditional loan would. In order to ensure we have a closing that is as smooth as possible and on TIME I have created this post to guide you Realtors on how you can us assist us AND your clients in getting our FHA 203K loan closed.
1.) Purchase Contract – Needs to indicate FHA 203K financing and needs to provide 45 days to close. We need contingencies that are slightly longer than normal so we can get the inspection AND the contractor bids.
2.) Utilities — ALL utilities need to be on at the time of home inspection AND appraisal. Get them on and leave them on until we have an appraisal that indicates functioning systems. Why? Because when a foreclosed / vacant house sits, and the systems are inactive for an extended period of time, they tend to break. For a home to be FHA approvable we need functioning systems. With a 203K we can correct any issues with plumbing, electrical or HVAC, but we need to know if they are broken or not. Therefore, we need utilities ON.
3.) Inspections – Beside your home inspection, which should be standard on any purchase, FHA 203K loans may require additional inspections if the purchase contract or pre-existing conditions call for them. If the house is vacant for more than 30 days and is on septic then we need a septic inspection. If the purchase contract calls for a termite inspection then we need the termite letter. Be aware that depending on property condition additional inspections may be required.
FHA 203K renovation loans are the best loan for this market now, but it is no secret they require some additional effort and some additional time for the participating parties. Realtor’s, listen to you loan officers and help us help you get OUR FHA 203K loan closed ON TIME!
[...] Getting your FHA 203K closed – Tips for Realtors – If you have a client who is considering an FHA 203k loan here are some good pointers from the [...]