There are many working parts to an FHA 203k loan. In addition to your mortgage provider and the party you’re actually buying the property from, you’re also dealing with the company that will be in charge of the renovation project itself. It can get confusing. Here are a few key elements to remember to keep everything straight.
Hire a licensed contractor—Generally speaking, you can’t be the one who is making the home improvements. A trained and officially licensed contractor needs to do the labor. It’s always best to leave fixes to the experts, especially since the updates are designed to make the home more valuable.
Project must be finished within a prescribed period—Another advantage to hiring a professional is timeliness. Your lender will work out a schedule for when the project will begin and conclude, but most require it to be finished within six months.
Must use property as a primary residence—FHA 203k mortgages are designed exclusively for those who are upgrading a house that they will live in, so flippers and other real estate investors may have to seek a different loan. It also usually is for rehabbing a single-family residence as opposed to a condominium or townhouse.
If this sounds like a mortgage that is in keeping with your homeownership goals, Guild Mortgage can help you get there. Contact us to find out more about this and other renovation mortgages.