203(k) loan

[Jake0215]

Can someone explain to me how a 203(k) loan works? Are you getting a loan for the expected value of the home after the rehab has been completed? So, say a house is on the market for 100k, but the expected value could be 150k. You would buy the house for 100 and the 50 could be spent on repairs? All the while paying a mortgage on 150?

[Cloudlb]

Yes, that's my understanding -- the mortgage and renovations are bundled together.  I am researching this type of loan, and it appears pretty complicated.  Has anyone been through this process?

[Anonymous]

All I can say is a nightmare 

[Cloudlb]

Well, did you try one? complete one? 

I'm reading it is very complicated if you just go into it blind, and if your real estate professionals, including agents, mortgage officers, HUD consultants, and appraisers aren't experienced with it.  You also have to have good contractors--not easy to find.