Question about 203 k Loan

**TexasCourt** · 06-28-2009, 12:46 AM

Hello,

I have a question about a 203 k loan. I am currently looking to purchase my first home. I have submitted an offer which has been accepted. The mortgage company I am working with has already approved me for the cost of the home, plus a certain amount rolled into the loan for repairs. I am having an inspector go out to the house on Monday to complete an inspection. I have 7 days from the time the contract was signed (as my realtor explained it to me) to get an inspection and get out of the contract if there is too much work to be done on this home.

However, I spoke to someone recently and he was telling me how stringent and difficult the 203k loans are in comparison to a conventional FHA. The bank selling this foreclosure will only take a cash offer or a 203 k however. This same person told me that even though I might have an inspector, and that inspector will say (for instance) that the roof will pass, that an FHA approved appraisor might not pass the roof, and is likely to be very strict about what needs to be repaired.

Let's say for example, the house cost 210k and I was approved for 40k in repairs, bringing my total approved mortgage to 250k. My question is this: what happens if this FHA approved appraisor comes out to the house and calls for 100k in repairs?? I have not (and cannot be approved) for that--what happens then?

Also, does anyone have experience with these loans? Are the FHA appraisors really this stringent?? Thanks in advance.

**Greg** · 06-28-2009, 08:46 AM

Originally Posted by TexasCourt

The bank selling this foreclosure will only take a cash offer or a 203 k however. This same person told me that even though I might have an inspector, and that inspector will say (for instance) that the roof will pass, that an FHA approved appraisor might not pass the roof, and is likely to be very strict about what needs to be repaired.

The reason the bank will not accept anything other than cash or a 203k is because the house won't qualify for any other type of financing so you really don't have any choice here. The inspector who handled my 203k was not that bad.

Originally Posted by TexasCourt

Let's say for example, the house cost 210k and I was approved for 40k in repairs, bringing my total approved mortgage to 250k. My question is this: what happens if this FHA approved appraisor comes out to the house and calls for 100k in repairs?? I have not (and cannot be approved) for that--what happens then?

Also, does anyone have experience with these loans? Are the FHA appraisors really this stringent?? Thanks in advance.

If your regular licensed home inspector doesn't find something then the fha guy won't find it either. Just make sure you get a good inspector so you can find out the cost of repairs up front.