Now that you have your credit in order for a mortgage loan approval, and you have sufficient in the bank to close on a mortgage loan, it is time to look for a home to buy.
Looking for a home to buy is a frustrating task and can be overwhelming. It is important that borrowers find a knowledgeable Real Estate Agent to work with before they start their home buying search. When a borrower is specifically looking for a character that needs renovation, it is important that a borrower find a Real Estate Agent that knows the FHA Renovation Loan program before they start the search.
Because so many Real Estate Agents do not know and understand the FHA renovation loan program it is going to be difficult to find one. Some agents will steer a borrower away from a character that needs renovation. An agent that does not know how to write an FHA renovation buy contract does not know the program and will cause delays in closing the loan.
In the twenty years that I originated this exciting renovation loan program, I found that agents that did not know how to write the contract caused problems with the time of action of the loan closing. Some agents realized this was an exciting niche product and took the initiative to learn the product. As a borrower you are hiring the agent to work on your behalf, you should insist that they know what they are doing or take classes to learn how to write the contract. Unless a Loan Originator has a Real Estate License, they are not allowed to help the agent with writing the buy contract.
The FHA renovation loan contract should be written for the sales price only. The contract should not have the renovation amount included in the sales price. The final loan amount will be higher than the sales price because the renovation costs will be included by the Loan Officer.
If the character being purchased is a resale from a buyer, then there should be wording in the characterize or addendum that states the following:
The buyer has applied FHA 203K renovation financing and the contract is contingent upon loan approval and any other improvements required by the or the Direct Underwriting Lender.
Most of the HUD homes across the nation are eligible for the FHA renovation loan. HUD has a standard contract and there is a box that must be check that states the loan for that character must be the FHA renovation loan. If the buy contract is incorrect then it will delay the loan closing.
This is the most exciting mortgage loan program obtainable, learn it if you are going to buy a home.