07/28/09, 01:06 PM
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Join Date: Jul 2007
Location: Northcentral Ohio
Posts: 655
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Yup, they are a pain. We bought our house with a 203k. You can do it, but I can tell you, after going through one, we would never do it again.
We bought our house with the intention of doing the rehab ourselves. We needed to gut the place and put up insulation and drywall (was all lathe and plaster), totally redo the electrical (which my FIL said he would help us with, as he is a retired electrician), blah, blah, blah. We started the loan process (I htink we had about a month-6 weeks before closing as the previous owners were having an auction and such for the personal items of her parents). No problem. Well, like 4 days before the closing date, we were told we had to get the well tested. Ok, got it tested. Then it was that we couldn't do the electrical, we had to hire someone. We had to submit quotes for EVERYTHING. Well, we were told that the quotes were for estimation purposes....later found out that most of the work we wanted to do under the rehab part we weren't even allowed to do ourselves with that type of loan. ALL plumbing, electrical, HVAC work HAS to be done by a licensed person/company. Even if you OWN a company who does that work, you can't use family members to do it.
OK, the other thing to consider is that you don't get the rehab $$ up front to pay for things. You get two draws on the money....it has to be used in a 6 month time period. We ended up getting a credit card with like a 3-4k limit on it and maxing it out....then repaying the CC with the rehab money. The rest of it we finaggled somehow (we had 16,000 in rehab money altogether). They are uber picky about some of the dumbest things....like we have old wood siding on our house. We ran out of nice weather (we're in Ohio) to paint, so we told them we wern't able to finish, but would finish up the painting in the spring. Oh, can't do that! Our 6 months was up in February....guess what we were doing in February?? Painting our house. 35 degrees and raining. Yeah, just so that we could say we finished painting for when they came out to check that we actually did the work. Needless to say, that was a couple hundred dollars wasted as we had to go back and scrape it all of in the spring and repaint.
It may go a bt easier if you have a loan officer who actually KNOWS about these loans. We found out, way too far into the process, that the guy we had knew squat about the 203k loans. We had to push back our closing date like 4 times.....we started the loan on April 20th and ended up closing on August 15th.
It is very difficult to find a loan program out there that allows you to do the work yourself...Virtually impossible from our experience. It was the biggest headache and most stressful experience!
Good luck to you.....I hope you have a better experience than we did!!!
Shawna
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