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How Do I Choose My FHA 203K Lender?

Choosing a FHA 203K Lender

Why Is 203K Lender Selection Important? What Should Potential FHA 203K Clients Look For?

203k.tv When I started specializing in 203K Renovation Loans there were very few people that offered the product. There was little to no training and you were mostly resigned to using a lender that would end up selling the loan to a certain big 4 bank that, quite frankly, sucked.

Times have changed, there are multiple 203K lender options these days and it seems that every loan officer now offers the product. Competition is good right? It is good, for the most part.

It is fantastic for the foreclosure market that lenders have finally joined the show and made the 203K loan widely available. After all, foreclosure renovation loans, like the 203K, the HomePath Renovation and the HomeStyle, are integral pieces to restoring the housing market.

However, the growth of the renovation loan market comes with a price. Lost earnest money, useless inspections, ridiculously long escrows, angry sellers and frustrated home-buyers. It doesn’t have to be that way though.

Those of you that have researched the 203K have seen and heard the horror stories. On the message boards, in the forums and from Real Estate Agents and even mortgage lenders. FHA 203K loans are too difficult, too much paperwork, too slow and too expensive.

Guess what, they are right. They are all of those things if you choose the wrong Loan Officer, the wrong HUD Consultant or the wrong Contractor. 203K loans are a specialty mortgage product, they require a SPECIALIST.

It’s Not the 203K Loan Product, It’s the 203K Loan OFFICER

I understand the bad rap that 203K loans get. I get between 5 – 10 calls a week from frustrated home-buyers working with the wrong loan officer, the wrong lender, the wrong consultant or the wrong contractor. For most of them it’s too late, I can give some advice, but I can’t save them or rescue their closing.

They didn’t do their research. They entered blindly into one of the largest transactions of their life. It’s not all the customers fault, many of them trusted their agent to get them to the right loan officer or that their loan officer was qualified.

I’ll probably ruffle some feathers, but 80%+ of agents and loan officers are not qualified to handle even a basic transaction, let alone a renovation loan. So how do you avoid the 80% and choose wisely? Research.

Choosing Your 203K Loan Officer

I think this is obvious, but clearly you start with Google. Educate yourself on the product FIRST. If you haven’t done the research then how will you know if you loan officer is answering your questions correctly?

As you peruse Google, Bing or Yahoo for 203K info you’ll see at a lot of the same folks showing up. These are you experts. They may not be in your area, but they can probably guide you to a 203K expert that is. Of course, the best bet is to find a national 203k lender (like myself) that can help nationwide so you know that you have a loan officer that can execute the renovation mortgage process.

Don’t forget about LinkedIN or Facebook Fan Page search, both will guide you to 203K experts, who is recommending them and their accomplishments.

Finally, you need to interview the candidates. They should, without hesitation, be able to answer some basic questions. Here are a few of the most important.

  1. What’s the Difference Between the 203K Streamline and the Consultant 203K?
  2. How Many Renovation Loans Have You Closed?
  3. How Are the Draws Disbursed?
  4. What Additional Fees Does the 203K Have?
  5. How Long to Close?
  6. Do You Offer ALL the Renovation Mortgage Products (HomeStyle, HomePath, EEM, Jumbo)
If they hesitate on any of those questions then you do not have a 203K specialist. Finally, if they offer up anything longer than 45 days to close then keep looking. There’s NO reason a 203K loan should take longer than 45 days assuming YOU hold up your end of the bargain and get your contractor bids in a timely manner.

 

FHA 203K loans are an amazing product. They will absolutely give you the best value on a home purchase. Don’t assume that anyone can execute one though, do your research.

 

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203K Bathroom Renovation

January 7, 2012 by · 12 Comments

About Jonathan

Jonathan & his team take a different approach to mortgage lending. Instead of offering every loan product on the market, they prefer to specialize in a few niche products. Instead of knowing a little about everything, Jonathan prefers to know everything about about these niches. This niche based lending focus allows the best mortgage loan experience. With a focus on Renovation Mortgage Loans Jonathan has been able to drill down and master the subtle intricacies involved with these niche mortgage products. (404) 551-3845 (949) 244-5464

Comments

12 Responses to “How Do I Choose My FHA 203K Lender?”
  1. Jeff Onofrio says:

    Jonathan:
    You are dead on with this post. I am in the same spot as you and I get the same phone calls from borrowers who went with the big lenders or someone who told them that they could do 203k but they really had no clue. Finding a specialist is KEY. Buyers or home owners need to find a loan officer who specializes and has a network of people- consultant, contractors, etc, etc…having all the parts in place makes all the difference.

    Good luck and nice post!

    Jeff Onofrio
    Director of Renovation Lending at AnnieMac Home Mortgage
    Mobile- 609-217-9409
    Office- 856-505-6717
    http://www.anniemacrenovationlending.com

    Renovating and Rebuilding America – One Home at a Time

  2. Bob Rutledge says:

    Great post Jonathan, I do have to admit that much of what I know about the FHA 203k mortgage I learned from Jonathan. I have been helping home buyers secure FHA 203k mortgage financing for quite awhile and I would be if it wasn’t for Jonathan Blackwell.

    Too many loan officers are TRYING to do these loans but it truly takes a loan officer with the right lender and the experience with knoweldge to get them done well….sometimes just done. I know that 25% of my new FHA 203k loans come from borrowers that had started the process with an inexperience loan officer and lender. Great post with excellent advice.

  3. Thanks guys.

    Both Bob and Jeff are renovation experts. Bob has really taken the renovation market to another level in St. Louis.

    Jeff and crew at Annie Mac are doing a killer job in the Northeast.

    Jonathan

  4. rose says:

    do you know any specialist in 203k loan in long island, new york? i’m stil frustrated looking for a reliable one

  5. Lynn says:

    Great article! We are searching for an experienced 203K loan officer in the Fort Lauderdale metro area. Targeted closing date is Oct. 30th. Please refer someone if you are able.

  6. amanda says:

    We are looking for an experienced 203K loan officer in the Toledo/Fremont Ohio area. Would love your feedback!! Thank you

  7. Rachel says:

    We are looking for a specialist in Oklahoma, the Tulsa area preferably. Is there anyone you can refer? Thank you!

  8. jon says:

    Hi, can you refer me to a 203k specialist near Greenville, SC? Thank you!

  9. I recently moved to a National Lender and can now help folks nationwide (with the exception of a handful of states).

    Anyone needing assistance is welcome to give me a call at (404) 551-3845

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