did you know...

If your home was built before 1978, any contractor performing work that disturbs paint must be certified and follow specific work practices to prevent lead contamination.  It's called the RRP Rule and is regulated by the EPA. 

Why a 203k?

by Randy 6. August 2011 00:03

Because it's the cheapest money you'll ever obtain to fix up the house that you're trying to buy or you're already living in.  Mortgage rates are still amazingly low and there are just too many foreclosed and dilapidated properties out there.  Those homes simply can't sell unless they will be renovated to some degree.

However, the 203k isn't a good fit for most people.  Lately, I've been working with folks who, if they had their choice, wouldn't pursue the 'K' option.

It goes like this:  the house is a short sale or has been foreclosed.  It's a great deal.  An offer is made and accepted.  And, oh, by the way, somebody yanked out all the copper pipes and wiring  maybe because they're mad at the bank or they're taking the copper to the scrap yard to get paid handsomely for the scrap.  Bummer.  The bank halts the loan.

Wait!  The 203k allows the buyers to get the money they need to put the pipes and the wiring back in!  "Let's do it!"  But wait again.  Along with the 'K' comes rules. . . many, many rules.  Remember, it's the gummint.  They like rules-- most of which don't make much sense and are for sure contradictory and confusing.  We all have to follow those rules and conform to the program guidelines.

Homebuyers that were looking for a great deal on a home and suddenly have to pursue a loan program they didn't know existed don't really like to conform to some arcane and confusing rules. 

These folks aren't a good fit for the 'K'. 

You want to do the 'K' because you know what to expect--both the good and the bad--and you know that ultimately you'll be taking advantage of very, very cheap money, great interest rates, and usually realize significant equity once the renovation is completed. 

 

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