March 1, 2016

FHA 203k Process

What you should know when selecting a 203k contractor in Chicago!

When a home buyer wants to purchase a property that is in need of repairs or upgrades, the home buyer must first obtain financing to purchase the home and then additional financing to complete repairs. Then they must obtain a permanent mortgage after the repair work has been completed.

Throughout the Chicago area there are a large number of homes being offered through foreclosure or short sales which are normally at a substantial savings to those that are listed as move-in condition. There are also homes in well-established areas that are being competitively sold, due to the fact that many of them are in need of some sort of renovation. All of these houses, whether from foreclosure or even neglect, can benefit from the 203k loan program.

Standard 203k Loan is for projects that have renovation costs exceeding $35,000. They are more complicated projects that involve structural changes, exterior landscaping, or other major renovations. The Standard 203(k) is also used if your project requires architectural exhibits.

Streamline 203k Loan is designed for projects with renovation costs that are less than $35,000. These projects are not nearly as extensive and don’t require a consultant or architect, therefore, they can be processed and approved much faster.

The 1, 2, 3s, of 203k!

1 – Find your team of 203k specialists who can help guide you through the process. If you are reading this you have started in the right spot and we can help point you in the right direction of a lender who is well versed in the 203k loan process.

2 – Locate your new home! If you are looking for a good partner we would be glad to point in you the right direction. If you have a realtor already, that is great too.

3 – When the property has been identified you'll want to contact Inland Home Remodeling so that we can help you determine what scope of work will be desired and required.

4 – All documentation is submitted to the lender so that the they can prepare all of the required items that will allow the property to close.

5 – On final approval, your loan will close and the improvement funds are placed in escrow.