FHA 203K

[Wanda Watson]

Help!! I'm going a 203K. Do I need to do 2 appraisals or can I do one appraisal with the hypothetical assumption that the repairs have been made and list a cost to cure?


Wanda

 

[Wanda Watson]

Help!! I'm going a 203K. Do I need to do 2 appraisals or can I do one appraisal with the hypothetical assumption that the repairs have been made and list a cost to cure?


Wanda

 

[NC Appraising]

It depends. If it is a REFI, and the property has a good amount of equity with no other outstanding mortgage, the lender can order a COMP check from local RE agents, or just use the assessed value from the tax card.


Here are some good links to get you started.
Streamlined 203(k)

Limited Repair Program

Mortgage Letter (a must read)

203(k) Rehab Program

Q and A on 203(k)

 

[NC Appraising]

Required Appraisals

[FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]In order to determine the maximum mortgage amount, the 203(k) valuation analysis consists of two separate determinations of value.[/FONT]

1. 
   [FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]A. As-is Value. A separate appraisal (Uniform Residential Appraisal Report) may be required to determine the as-is value. However, the lender may determine that an as-is appraisal is not feasible or necessary. In this instance, the lender may use the contract sales price on a purchase transaction, or the existing debt on a refinance transaction, as the as-is value, when this does not exceed a reasonable estimate of value.[/FONT]
   [FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Further, on a refinance transaction, when a large amount of existing debt (i.e., first and second mortgages) suggests that the borrower has little or no equity in the property, the lender must obtain a current as-is appraisal on which to base the estimated as-is value.[/FONT]
   [FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]On a refinance, the borrower may have substantial equity in the property to assure that no further down payment is required on the new loan amount. In some cases, the borrower will not have an existing mortgage on the property. In this case, the lender should obtain some comparables from a real estate agent/ broker to estimate an approximate as-is value of the property.[/FONT] [FONT=Verdana, Geneva, Arial, Helvetica, sans-serif]Another way of establishing the as-is value is to obtain a copy of the local jurisdiction tax valuation on the property.[/FONT]

There is more to it. Please read the links that I have provided; you know to get competent.

 

[Mike Boyd]

That is a decision to be made by your client.

If they want it as completed, do it subject to the plans and specs that they provide you...just as you would any construction loan.

If they want an "as is" report and an "as completed" report Do them both. Earn 2 fees!

If they have not provided plans and specs then you have to get them.

 

[Daystar]

You first need the work write-up from the consultant.

 

[Mr Rex]

You first need the work write-up from the consultant.

Unless its a Streamline 203K.

 

[Nikolay Pavlov]

Are 203(k) loans always FHA, or can be conventional?

 

[Don Clark]

Are 203(k) loans always FHA, or can be conventional?

203(k) is an FHA program. A lender may have a similar program but it will not be a 203(k).

 

[Mr Rex]

Fannie Mae has a similar program called Homestyle Renovation. Doesn't require a consultant, but the plans and specs must come from a licensed contractor. USDA also has a similar program.