What is an FHA 203k Rehab Loan? It’s Not Limited To $35,000!

A big problem with flipping houses these days is that most buyers are first time home buyers with FHA loans, but the FHA loan restrictions have become so tight, that most loans end up falling out of escrow.  That especially applies to the flips that are being resold within 90 days, with FHA lenders requiring two appraisals, contractor certs on items marked as Health & Safety on the Inspection reports, etc.

To avoid this problem, tell your buyers to get pre-approved for an FHA 203k Rehab Loan, which will allow them to buy the property in “as is” condition, and give them the funds to repair it after the escrow closes.

Besides the HUD info page (click here), here’s another great resource – a blog by Dustan Shepherd, which provides a lot of good info about 203k Loans and 203k Streamline Loans,  and the process involved in obtaining and closing one – http://203kkc.com/Home.html .   Dustan’s blog, by the way, is full of information even I was not aware of, such as that FHA 203k Rehab loans are NOT limited to $35k and can be well and above $100k!!!

And here is an eHow article about FHA 203k Rehab loans, and how they can be used to rehab the property you’re purchasing – “What is a 203k Rehab Loan?”.

FHA 203k rehab loan

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