January 2011

Chicago FHA 203k – How Are the Repair Funds Dispersed, and How Long Does It Take Before the Contractor is Paid?

If you are buying a home that needs repairs or looking at a major construction program and considering the FHA 203k rehab loan in the Chicago area, there is one question you need to ask your lender – How will the contractor be paid, and how long will it take before the funds are dispersed? This is a major issue and one that too often is a surprise to both the borrower, and the contractor who handles the repairs. Many of the FHA 203k rehab loans in the Chicago area are made by brokers, or are brokered out by mortgage companies that start the loan file and may even close the loan in their name, but who will then sell the loan off to the final lender right after closing. The problem here is that it is often set up so that no money is given out until the end…

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Chicago FHA 203k – The Biggest Concern for Realtors and Sellers When Working With an FHA 203k – Will the Loan actually Close?

        A common question I hear when one of my clients presents an offer for an FHA 203k rehab loan, is yes, but do these things actually close? The answer I always give is Yes. The Chicago area FHA 203k rehab and renovation loan is a great product and we close them regularly. But the reason this is such a common question is because so many contracts are written with an FHA 203k and something falls apart before it gets to closing. This leads to a lot of frustration on the part of Realtors and sellers, because no one gets paid if the mortgage doesn’t close. The problem isn’t with the mortgage itself, the main issue is more often about how the loan is handled, and who is handling the loan. The truth is, most loan officers have never worked with an FHA 203k before, and most…

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Chicago FHA 203k Mortgages are a Great Way to Buy Multi Family Homes (2-4 Flats)

I         If you are looking for a way to combine home ownership with an investment, buying and living in a multi unit home or small apartment building might be the best way to go. This isn’t the right choice for everyone. Being a landlord that lives in the building means you are the go to person when the toilet plugs up or the bathroom sink drips. Being a landlord adds more responsibility, but for many Chicago homeowners it is not only a nice life style, but a way to have your tenants help pay for your mortgage, and this can be a great way to cut your expenses and build wealth over time. If you are looking for a 2 flat, 3 flat or 4 flat in the Chicago area and plan to be an owner occupant, an FHA mortgage may be your best financing option….

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Are Chicago FHA 203K Mortgages Just for Distressed Properties?

Most people associate the Chicago FHA 203k with mortgage with foreclosures short sales and distressed properties. Theses homes often need repairs and sometimes extensive rehab, and if this is the case, the FHA 203k renovation loan is often the only way to go. But sometimes the best uses for the Chicago FHA 203k rehab loan is with homes that are already in good, functional shape. The question here is what do you plan to do with the home once you move in? Most people want to do some work once they get into their new home. Sometimes it is just cosmetics, painting, wallpapering and the like. But if you plan on doing more than this, it might make sense to look at the Chicago area FHA 203k mortgage as an option. The Chicago area FHA 203k rehab mortgage is often the least expensive way to buy and remodel a home….

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Chicago FHA 203k Mortgage Pre-Approval – It Just Takes a Quick Phone Call to Get Started

If you are looking to buy and rehab a home, or if you have a home that needs some work and you think the Chicago FHA 203k renovation loan is the answer, the first step is to make sure you qualify and that this is the right solution for your situation. Getting pre-approved for an FHA 203k loan involves two parts. First making sure that the property improvements you are planning on willl work with the program, and second, making sure that you will qualify for the Chicago are FHA 203k rehab mortgage. The qualification for an FHA 203k is the same as qualifying for a regular FHA loan. Some of the advantages include: The down payment is as little as 3.5%. Credit standards are much more common sense than with conventional. 640 minimum credit scores. All the down payment can be a gift. Co-signors are allowed. There are a…

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Chicago FHA 203k – How Long Does it Take To Close on an FHA 203k Rehab Loan?

This is one of the questions I get most often, how long does it take to close on an FHA 203k rehab loan? The truth is, it depends. I have closed Chicago area FHA 203k renovation loans in under 30 days, and other times it has taken much longer. Part of it depends on the way the lender processes the loan and other factors, but this loan, more so than most other loans, is in many ways under the borrowers control. That may sound like a strange statement as the loan has to go through all the normal paths to approval, getting the application together, getting the appraisal, going through processing and underwriting, and all of these take time. But the biggest issue with most FHA 203ks is getting the contractor’s bids together. This is the first step in getting a Chicago area FHA 203k rehab mortgage approved, and this…

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