10 Steps to the FHA 203k Loan Process
Property Resolutions, Inc understands the 203K loan process and its intricacies.We are an experienced 203K contractor with many years of experience. See the steps below that outline how to obtain a 203K loan.
- Get Pre-Approved – This is always the first step for any home purchase, FHA 203K loan is no different.
- Locate a Property — Work with a Real Estate agent ,that understands 203K loans, to find a property . Be sure to confirm it qualifies for the type of loan for which you have been pre-approved.
- Make an Offer & Negotiate the contract – Be sure and indicate FHA 203K as the loan product in the purchase contract.
- Offer Accepted – Once your offer is accepted, you are ready to move forward in the process.
- Home Inspection &Start Gathering Contractor Bids –Obtain a home inspection by a licensed Home Inspector. The inspector will identify any problems in the property and determine any FHA required repair.Contact Property Resolutions, Inc., at 773-488-5600, to get a Contractor Bid. We will provide a detailed scope of work that outlines all projected costs and timing for requested renovation and repairs.
- Appraisal – Obtain an appraisal that is conducted by a licensed and approved FHA appraiser. The 203K appraisal calculation is based on the “After Repair” value. Once the appraisal is received, there may be additional items required to add to your contractor bid. Bid revisions after the appraisal are common.
- Final Loan Approval – Your appraisal is in and looks great on value, your credit has been approved and you are ready to close!
- Loan Closing –Head to the closing attorney or title company office and sign the closing documents. Depending on the bank, this will be 30-60 days after going under contract. Congrats, the house is now yours!
- Renovations–Work begins and must be completed in 6 months (with an FHA 203k Streamline) to 12 months (Full FHA 203k loan)
Final Inspection / Title Update – You’ve completed all the work and are ready to get your final draw. On the streamline 203K, the inspector will be sent out to confirm everything has been done as specified. If so, the final title will be ran to confirm all the contractors have been paid and none have put a lien on your home. If everything is as planned, the renovation escrow will be closed and you have a standard FHA loan.The above is a typical 203K loan process, depending on your particular property there may be additional steps required. If your plans include a major structural renovation, you may require architectural drawings. Property Resolutions is able to provide these drawings for you. Additional inspections may be required by underwriting during the process. Each 203K renovation loan is unique and some of the steps in your loan may be in a slightly different order.