Georgia FHA 203K — FAQ Part ONE
ByTurning a house into a dream home - that is the power of FHA 203K loans. From an extra bedroom to a bathroom update, a living room to a luxurious master bath, from a modest expansion to full on ground up remodel, FHA 203K loans offer homeowners an affordable way to fulfill their unique vision.
Today we explore some of the most frequently asked questions when it comes to FHA 203K loans…
Q: What is the down payment on a FHA 203K loan?
A: 3.5%, but you can put down as much as you like. The down payment can come from cash on hand, gift from a family member, relocation money from your employer, community grants or from your 401K.
Q: I want to do my FHA 203K renovations myself. Can I?
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
Q: Can I use FHA 203K to renovate a condo?
A: Yes, but restrictions apply as to the number of units in each building. FHA also has other guidelines on condo complexes. If the condo is eligible you will only be able to do interior work. For the most part, your condo will be difficult to get approved on a FHA 203K loan
Q: Can I be compensated for materials I purchased outside the work listed on the initial FHA 203K contractor bid?
A: No. Your 203K renovation escrow amount is established before the loan closes. In some rare cases you can request a change order after your closing to fix an issue that came up during the 203K renovation process. Be aware, however, that you must do this PRIOR to completing the work. Generally, any work performed outside the scope of repair as listed on the bid when your loan closed will be your responsibility to pay for.
Q: Do I need a home inspection? Do I need a special Inspector?
A: Yes! You should get a home inspection on the purchase of ANY home. The inspection will help ensure our 203K loan doesn’t encounter any unexpected problems during the renovation process. On most 203K loans you can use any certified home inspector to do your inspection.
Q: Can I get money before the 203k renovation begins?
A: There are no 203k upfront funds disbursed at most lenders with the exception money to order flooring, cabinetry and windows and other like materials that can sometimes take time to deliver and require an upfront deposit. For this reason we recommend your FHA 203K contractor have a line of credit so they can begin work immediately. You can read more about the contractor selection process HERE.
STAY TUNED for Part Two of my FHA 203K renovation financing FAQ.
