What Is A FHA 203k Rehab Mortgage Comedy?

The sea was rough that day my friend. Then George pulled the golf ball out of the whale’s blow hole, but where was Jerry Seinfeld? He was conveniently missing during all of this. He might have been writing the next episode as they just don’t spontaneous appear out of thin air. If only writing a sitcom were so easy as the comedy of errors that can happen during an FHA 203k Renovation Mortgage, we would all have successful TV shows making millions laugh a week like Jerry Seinfeld, Ray Romano, and Dick Vandyke.

FHA 203k Mortgage Comedy Continues…………..

It’s just not that difficult for things to go wrong when you break open walls, kick in doors, and tear kitchens out of a house. Although sometimes the mishaps are amusing, sometime they are so funny. The comedies tend to be more Shakespearean and less Beverly Hill Billy like; and don’t forget there is always an Archie Bunker calling someone a “Meat Head” at every mistake. The jokes aren’t as funny because sometimes the meat head is you, or me, or our contractor. Please don’t forget the subcontractors and the building inspectors as they are often the biggest jokes of all. These jokes slow you down, stop you from working, eat into your repair reserve, cause you to change your plans, and sometime completely alter your renovation outcome. As your family pays rent a little longer, stays in hotel an extra month, or moves in with your family for a much longer temporary visit, making a mortgage payment for a property you can’t live in because it doesn’t have a kitchen or working water becomes less and less funny.

Remodeling Your Home With FHA 203k Mortgage

Being prepared for the unexpected when you start rehabbing a house is part of the game. Be sure you have a place to stay and a backup plan for another place to stay in case you have to stay a little bit longer. Make sure you understand on a major renovation project things can take longer as unexpected turns can happen.

Need To Make Mortgage Payments While No Living In Your Home

Realize that you are responsible for mortgage payments even when you are not living in the house. In most, and many cases borrowers that get into major rehab projects have to continue to make rent payments and a mortgage payment at the same time. Make sure your 203k renovation specialist is truly a loan officer with experience in the FHA 203k renovation mortgage process. He or she should advise you and explore the possibility of holding back mortgage payments to be made on your behalf from the renovation construction escrow. The FHA 203k program allows you to escrow 6 such payments.

Maximum 6 Months To Complete Renovations With FHA 203k Mortgage

An FHA 203k Mortgage allows for 6 months to finish the construction project. However, as pointed out the rehab can run into the unforeseen. I had one initiated in the early part of 2013 and finished in the late part of 2014 that took over a year and a half in the City of Chicago. The alderman’s office recommended the borrower’s general contractor use a specific law firm to obtain simple permits. Well he didn’t use the alderman’s advice. Read into that what you may. The alderman’s office asked that all the neighbors within a defined area be notified via US Mail of the routine dormer request and re-siding of the house to see if his office would receive any objections from his constituents. They received no such objection. The alderman’s office then requested that all the immediate neighbors sign a card or something to that affect acknowledging their consent to said project. The Chicago alderman’s office effectively delayed the start of the construction almost 7 months. The FHA 203k requires the project be completed within 6 months.

Discovery During Renovation

I had another 203k where they found 6 skeletons in the walls of the once living and breathing; but they were just cats, raccoons and the like. However, the contractor was superstitious and walked off the project thinking the house would now be haunted. No kidding…. A new contractor had to be hired and this took a while. A general contractor had to agree with the pricing the previous contractor had spelled out on his bid. It turned out the superstitious contractor’s pricing was fantastic and hard to match.

Unexpected Repairs During Renovation Process

Just one more crazy story, because this one is hard to believe. The bathroom in the middle of the living room. The bought his house with what looked to be a closet in the middle of the living room. There were no utilities or electricity and the ability to connect such power was not only unavailable, but not advisable for health and safety issues. There were no support walls in this closet. Well it wasn’t a closet. Apparently it was a bathroom with the toilet and sink removed and covered up. However, the plumbing was never taken out. The water hadn’t been on in this home for years. There was no evidence there was of a bathroom ever being in the middle of the living room. What sounds even crazier is there was another bathroom, which was obviously the original bathroom about 10 feet away before the stair way going up. This bathroom was obviously the original bathroom in that there was a bathroom on the 2nd floor above it and one that may have been added later in the basement below it. Plus, there was a heating duct in the bathroom in the middle of the living room. I can’t explain that one either. Then there were 3 bathroom upstairs. There was one directly above the original first floor bathroom 10 feet away from the bathroom in the middle of the living room, and one in the master bedroom, and one in between 2 bedrooms in the Brady Bunch style. This was 3 bedroom home. Do the math and it just doesn’t make common sense.

Back to the whole point of this article, FHA 203k mortgages often bring a not so funny comedy to life.

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