FHA 203k Rehab Mortgage Loan Program With No Overlays


FHA 203k Rehab Mortgage Loan Program With No Overlays

This Article On How President Bill Clinton Saved The FHA 203k Rehab Mortgage Loan Program Was Written By Massimo Ressa of Loan Cabin and Gustan Cho Associates

In the 1970’s and 80’s an FHA 203K Rehab Mortgage Loan took approximately nine months to close
if it closed at all and another nine months to complete the construction.

  • The FHA 203k Rehab Loan product was brand new and completely broken
  • The real estate community was completely demoralized and disappointed that this much heralded program  had turned into another bureaucratic nightmare
  • During the period of the 70’s and 80’s FHA 203k Rehab Loan Program was just another broken federal program that was pushed to the side and left unused

Birth Of The New FHA 203k Rehab Mortgage Loan Program

The real estate brokerage community did not want to market and sell 1-to-4-unit homes and wait nine months for a closing, and mortgage companies decided there were too many moving parts to close and fund them in any reasonable time frame. Believe me I tried. I saw the value.

  • There was a glut of properties on the market that were not financeable without some repair money
  • So nobody specialized in the product and it was for all intents and purposes shelved until the regulation could be changed

President Bill Clinton And The New FHA 203k Rehab Mortgage Loan Program

Along came Bill Clinton as the President of the United States of America in 1993.

  • One of the responsibilities of the Department of Housing and Urban Development, HUD, is to maintain and sell FHA foreclosures, “HUD Homes”
  • President Bill Clinton’s HUD Secretary, Henry Cisneros saw the huge inventory and asked why they weren’t moving these properties quicker
  • Good question Hank
  • 80% of these properties were un-financeable using either FHA or conventional financing because they did not meet the minimum property standards for these types of loans
  • They needed rehab money. HUD’s recognition of the glut of inventory on their hands moved them re-visit FHA 203k Rehab Loan Program
  • The amended law was rewritten with user friendly access to buyers, real estate brokers and the mortgage community

Today the program is a huge success story. It’s a buzz word that’s now part of the dialog in the real estate community.  “Hey, let’s do a K on this property”.

About The Author 

This mortgage blog article on the birth of the New FHA 203k Rehab Mortgage Loan Program was written by Massimo Ressa, the Chief Executive Officer of Loan Cabin Inc., also known as The Mortgage Whisperer by mortgage and real estate professionals nationwide. Massimo Ressa is also a contributing writer for Gustan Cho Associates and has helped lawmakers and regulators launch the New FHA 203k Rehab Loan Program. Contributing Editors on this blog written by Massimo Ressa is Alex Carlucci, a Senior Vice President of Loan Cabin Inc. Alexander Thomas Carlcucci holds three doctorate degrees from the Massachusetts Institute of Technology ( Ph.D. in Civil Engineering), California Institute of Technology ( Ph.D. in Metallurgical and Materials Engineering ) and Stanford University ( Ph.D. in Molecular Material Science and Technology ). Alex Carlucci is not just an expert mortgage banking professional but also a real estate expert and real estate technology guru. Alex Carlucci also holds a Juris Doctorate degree from Yale University ( Classmate and Party Mate of President William Jefferson Clinton ) and a Master’s of Business Administration degree in mortgage banking from Harvard University. Loan Cabin Inc. is a direct lender headquartered in Lombard, Illinois. Loan Cabin is licensed in multiple states and has a national reputation for its no overlays on government and conforming loans. Alex Carlucci is the national consumer direct operating chief for Loan Cabin Inc. 

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