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Are there extra fees involved with an FHA 203(k) Loan?
The borrower will pay the same fees normally associated with an FHA loan. Contact Community Mortgage for more details on those extra costs. In addition, other costs mayinclude:
What is a contingency reserve?
A contingency reserve is a 15% of the repair/renovation amount and its purpose is in case of any unforeseen costs that arise. Any monies saved or not spent may be used as a one-time principle balance reduction in the mortgage amount at the end of the project.
Can I do the work myself?
No, you must hire a licensed certified contractor on a standard 203(k) loan. On a Streamline, you will hire 2 or 3 specialized contractors (heating and air, electrical, and carpentry work, etc) doing uncomplicated projects.
Can an investor use the FHA 203(k) Loan?
No. This is for primary residence borrowers only.
How soon can we close?
Your 203(k) closing is as timely as any other loan program. You should be in a position to close within 30-45 days after loan application. Would recommend a 60 day contract on a HUD REO property.
Is there a time limit for completing the renovations after closing?
Yes. You have up to 6 months to complete the work.
Additionally, there are two important time frames you should be made aware:
Can any contractor be a part of a 203(k) loan?
Any Licensed contractor can participate with the FHA 203k: