In this blog, we will discuss and cover qualifying for an FHA 203k mortgage loan in Texas for homebuyers and homeowners that need renovation. Over the last twenty years, the team at Gustan Cho Associates originated, processed, and funded over a thousand FHA 203K mortgage loan in Texas. We have seen some interesting, frustrating, funny, some not so funny situations develop. I have been in the mortgage business for 30 years. I have experience in every aspect of residential and commercial lending. I have done my share of HUD 203k mortgage loan in Texas. One reason the team at Gustan Cho Associates love originating HUD 203k mortgage loan in Texas is that each case scenario is unique and interesting. I always learn something from each FHA 203k mortgage loan in Texas file. In this article, we will discuss and cover 203k mortgage loan in Texas.
Case Scenario On HUD 203k Loan in Texas
In 2008 we were closing multiple HUD 203K Mortgage Loan Programs through our FHA approved 501c-3 non-profit partners. Our non-profit partners were HUD-approved to purchase, rehab and resell 1 to 4-unit properties at a 3.5% down payment. We had several non-profits that purchased, fixed, and sold over fifty properties.
Gospel Temple Case Scenario
My favorite group was a small west side church, Gospel Temple. We’re still friends today. They had a purchase contract on a 4-unit property. They completed a plan review and did their appraisal. We underwrote the loan and cleared the file to close
Closing FHA 203k Mortgage Loan in Texas
On the morning of the closing, as they always did, they did a final walk-through to make sure it had not been broken into or degraded in any way. When they got to the building with their realtor they thought they were on the wrong block. There was no building, just a vacant lot. It turned out the building next door was on the City of Houston fast track demolition list. You guessed it, the city’s demolition crew knocked down the wrong building. Of course, the City of Houston, Texas claimed no responsibility. Luckily the buyer scheduled a final walkthrough to check the status of the property.
Final Walk-Through Prior To FHA 203k Mortgage Loan in Texas Closing
The moral to this story, always do a final walk-through as close to the closing as possible. Had they closed on this without looking at the property prior to closing they would have owned a vacant lot? This Article Was Written By Dale Elenteny of Gustan Cho Associates Mortgage Group
Related> What Is A FHA 203k Rehab Loans
5 Reasons Why You Should Use FHA 203k Mortgage Loan In Texas
It occurs to me that a lot of home buyers want to find a home they can just settle into and live. That’s fine, and for a simple situation like that, a conventional or FHA purchase loan is perfect. Then there’s the specialty group which seems to be a lot more plentiful these days. I like to call them my FHA 203k Renovation Loans kids. They are somewhat younger and they have a knack for finding a fixing up stuff. This includes tinkering and just figuring out how to make things better. I’m not sure if their parents taught them how to do more by tinkering or instilling a sense of motion, (As in constantly in motion) but they like to find and fix things. Which brings me to the reason using FHA 203k Renovation Loans is a good idea for next home purchase. In this article, we will discuss and cover 5 Reasons Why You Should Use FHA 203k Renovation Loans.
Here Are 5 Good Reasons To Use FHA 203k Mortgage Loan In Texas For Next Home Purchase
The U.S. Department of Housing and Urban Development (HUD) is the parent of FHA. HUD has created FHA 203k Renovation Loans for homebuyers to be able to purchase fixer-uppers and foreclosures. Homebuyers find a house that is not able to be lived in; what is called “uninhabitable”. They are not going to get a normal or conventional loan on the property. This is because there is no value to it or the “as-is” value is worthless. For any lender in their right mind, lending on that kind of property is way too much of a risk. Seriously, how would they get their money back if the borrower defaults? They wouldn’t get any return on their investment. With FHA 203k Renovation Loans, that’s an issue that gets cared for upfront!
Buying Fixer-Uppers With FHA 203K Mortgage Loan In Texas
There are always issues with fixer-uppers that arise down the line. Using a conventional loan leaves buyers exposed to the nickel and dimes that will ultimately be needed to do future repairs. (It’s more like thousands of dollars) Using FHA 203k Renovation Loans can help make those issues a thing of the past by taking them off the table or calendar of repairs that will most likely be needed. FHA 203k Renovation Loans is designed to get that out of the way right away. Cheaper now vs. Expensive later. Think about how much it costs to repair a roof. Just the repair, later on, could be in the thousands. If you finance it through a consumer finance deal and can’t pay the “special terms” that offer 90 days same as cash kind of deals that are out there, you are laden with heavy interest.
Mortgage Rates On 203k Versus Regular FHA Loans
With the FHA 203k mortgage loan in Texas, the interest stays lower to where you’re talking about the difference between fix now with FHA 203k Rehab Loan and maybe pay $50/mo more versus financing later with the larger interest and pay more like $200-$300/month. It just makes economic sense. Equity anyone? ANYONE? What’s the difference between the appraised value of a cheap home versus the finished value? Could be huge.
203k Mortgage Loan In Texas Enables You to Buy Fixer-Uppers In Expensive Areas
Think about it, you find a cheap house that needs some fix-up, and you get an FHA 203k Loan to get the work done needed. Then have it appraised. Guess what? The value will have gone up substantially in many cases. Remember, you picked this piece of junk up for almost nothing. (This depends on your negotiation skills of course) . Now after using a FHA 203k Rehab Loan to get it fixed up, the new value will most likely have increased a lot. I know of people that could have sold their house the day they moved in just because of that major increase in value. When do you want that dream home? If you have a family and a busy work schedule, you do NOT want to be moving into a construction zone. Just not fun.
203k Mortgage Loan In Texas Will Get You A Brand New Home With A Lot of Home For the Money
You get to move into a home that is fully project completed. The professionals helped make it happen and it ends up looking like one of those “fix it up” shows from HGTV. What a relief to know your dream home is waiting. The bottom line is, that an FHA 203k Rehab Loan can help you get a dream home with some value in place that will allow you peace of mind in what you will hopefully have as a residence for many years to come without all the headaches of the constant fixing. Sure you can do smaller projects to enhance, but let a 203K loan help really drive the main project and get the house finished.
FHA 203k Renovation Loans With No Lender Overlays
Homebuyers of fixer-uppers can contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster. Or email us at gcho@gustancho.com. Gustan Cho Associates has a national reputation for not having any overlays on government and conventional loans. We are known as the number one mortgage lender with no overlays. Gustan Cho Associates has closed more FHA 203k mortgage loan in Texas with credit scores of under 600 FICO than any mortgage broker, banker, or mortgage banker in the U.S. We can go down to a 580 credit score on FHA 203k mortgage loan in Texas.
About The Benefits of FHA 203k Mortgage Loan in Texas
Dale Gracz is a senior loan officer at Gustan Cho Associates. Dale is in charge of all national branch operations and of all licensed and non-licensed mortgage personnel at Gustan Cho Associates. Dale Elenteny is also a staff writer for Gustan Cho Associates. Dale is a licensed mortgage loan originator himself. Dale holds his SAFE ACT NMLS state licenses in multiple states. Dale Elenteny of Gustan Cho Associates is the man that is in charge of operations. His responsibilities include that all files are submitted and processed properly and that all of our borrowers close their home loans on time.
April 7, 2022 - 6 min read