Demand for 203K construction loans has exploded in the last several months.   This is attributed to more clients are learning about the 203k program from lenders and realtors.   In addition, Fixers and REO properties sales  are more available.   This could be attributed to overall increase in values may be squeezing some investors from flipping REOs compared to last year.

This is a great program for buyers seeking value and strong desire to add their own design and decorating taste.  Since it piggybacks on FHA loan, with low down payment (3.5%) and low interests rates, there is nothing close in financing costs.

 There is also a great opportunity to leverage energy efficiency improvements with FHA Energy Efficiency Mortgage(EEM).  EEM extends the loan amount for energy improvements based on energy cost savings.

 The program is not without some challenges.  The process can be more complex involving contractors, and 203K consultant in addition to lenders, realtors and appraisers.   Program has been around since the 60’s, some of the provisions are out of date and vague.  But mostly, there is a  lack of recent experience with realtors and lenders.  

Active 203K consultants are a great resource.  Their current experience can be beneficial, avoid costly pitfalls and  help with resources of other experienced lenders & contractors.  To learn more about this 203K program, talk a local 203K consultant.   Check HUDs website  https://entp.hud.gov/idapp/html/f17cnsltdata.cfm.