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203k Financing? And how are the cost or repairs calculated, by whom and when? get a lender who does do 203K first. They wll let you know you need a general contractor to do the estimates and will be doing the work.
Good questions to ask the loan officer are: Have you ever funded a 203k, if so how many? What was the average time it took to close? Would you say past 203k clients were satisfied or was there issues? What is the difference in rate/fees between FHA and 203k, do you have a preferred contractor, do they provide bids as needed, who services the 203k after close, who disperses the money for repairs…. them or another bank…. how long do they take to distribute funds after repairs are complete. Are any funds dispersed at funding, if so what %?
The cost of repairs depends on many factors, most important is meeting HUD health and safety standards, these will be called out by an appraiser on streamline 203k and HUD consultant on FULL 203ks. If they are already addressed in the original contractor bid then its not an issue, if they are not they must be added to the bid. Ultimately the contractor determines cost of repairs and the appraiser or HUD consultant determine if ALL the repairs were addressed in the contractor bid or not (to meet HUD health and safety standards.)
Hope that helps, -Rafael Perez, imortgage nmls id 258379
What are some good questions to ask the loan officer when inquiring about 203k Financing? And how are the cost or repairs calculated, by whom and when?
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