Even though the FHA 203k Loan Program has been in existence since the 1970′s, many of us have never heard of it! Let me tell you a little about it, because there’s never been a better time to use it.
So just what is an FHA 203k Home Loan? Some call it the “Green” loan because the FHA 203k Loan was created to encourage the renovation of older homes. In order to qualify, a home must 20 years or older. In the US today, 80% of all homes are 20 years old or older! That’s potentially 100 million qualifying homes.
But wait, there’s more! The 203k is a purchase loan and rehab loan in one. With only 3 1/2 % down, homeowners can benefit from having a single loan. Not only does this loan have flexible qualification requirements for those with less than perfect credit, but it is assumable and it can be gifted to family members.
So now you know a little about the 203k loan, but why is this such a great time to use it? There are two great reasons.
- Because there are so many foreclosures and short sales on the market. Unfortunately, many of these homes have been poorly maintained, and potential buyers don’t have the necessary funds for renovations. The 203k is a perfect solution.
- Renovating is “green”. Need I say more?
If you’d like to become a 203k Specialist, there is a fabulous certification program available to you. You can learn all about this program at the REBuild USA website. Once you are a certified 203k Specialist, you have access to use the REBuild USA partner programs. REBuild USA partners include big names like Lowes, Pillar to Post, Wells Farogo and (of course) Obeo.
Well Fargo has FHA 203k certified loan reps in most markets nationwide. They have worked closely with the REBuild USA program, and they know what it takes to get an FHA 203k loan approved.
Pillar to Post inspectors are experts in FHA qualifications. They will work with the buyer to insure the buyer know what must be done in order to meet FHA guidlines.
Nationwide, Lowes has trained their management and staff to know what it takes to meet the 203k requirement. Instead of just setting your potential home buyer loose to find their own licensed, insured, bonded contractor, simply help your home buyer fill out a simple form on the REBuild USA website, and Lowes will do the rest. They will take care of the estimates and work with the loan officer to make sure all requirements are met.
And of course Obeo will be there, every step of the way with a very very cool new product. But I’m not letting the “cat out of the bag” yet! Stay tuned to learn more about how Obeo is going to revolutionize the way you work with home buyers!
2008 © Obeo
Awesome, thank you!!
I never knew there was such a Federal Loan program that could be used for green building products and promotion. I am happy to hear about this and will Blog about it to tell others.
http://www.sabinesgreenbuildingproducts.com
This is a very old story. Twenty years ago we had to over come resistance from the realtors. Most argue that this is only a gut rehab program or it takes too long and there is to muck paperwork.
I could never understand why they wouldn’t embrace this loan because it can save many deals where the Home Inspection identified major issues. Or it could be used to sell a vision of what a depressed property can be.
The 203k is not new. The individuals that know this program inside and out other than HUD is the 203K Consultant. I would suggest anyone wanting the correct information on this program including, Realtors, Loan Officers, Lowes, Home Depot and most importantly, the consumer, Talk to a 203k Consultant before anyone else as they will get you on the right track from the start. you can always contact me directly regardless where you are in the US
Thank You,
Michael Grace
The 203K Connection
mgrace@the203kconnection.com
A timely article. This information needs to get out to the masses. The Realtor community has resistance to the 203k because they don’t understand it and would rather wait for a cash investor to come along and buy the property rather than thinking outside the box and give the 203k a chance. They can discourage the seller from accepting 203k terms which narrows the pool of buyers. Hopefully with pros like Garrett and yourself we can change this and get the public to understand this is an excellent loan option.
Thanks for the feedback Garrett, it’s always nice to hear from someone who’s an expert. I appreciate your clarifications. I was trying to explain the RE-Build USA program, and how it works with the 203k loan. Absolutely the homeowner can use any contractor they choose.
There are a few corrections needed here. The 203K loan was developed in 1964 and was rewritten in the early 1990′s. I was part of the working group that made all the changes back then and have been doing 203k inspections for almost 20 years.
The 203k can utilize some “Green” building products but, they are suggested and not required under this program. I didn’t think the people reading this should be misled.
A building only has to be completed and occupied for one year. Not 20 years old.
Although the loan is fully assumable, only the down payment can be gifted and that has to be by a family member.
Your article sounds like only Lowe’s can assist with this loan. The borrower has the right to choose what contractor they would like to perform the work. They just have to be licensed and insured. In most cases a local contractor will be much less expensive than Lowe’s because Lowe’s will sub contract out the work and mark it up by 20%. So, in some cases the borrower might wind up paying more in the long run.
Garrett Feis
Garrett1605@msn.com
Used to be that 203K Specialists had to be approved by Housing and Urban Development (HUD)?
Has this changed?