Posted on: 23rd Oct, 2010 05:58 pm
We're looking into the 203k program to purchase a foreclosed house. The house used to be a lodge but is now listed a single family home. The previous owner tried to convert it into a bed & breakfast unsuccessfully, so we would have to go for a full 203K to make it into a home. Because of the size, we're likely to split the house into a duplex, which we believe is allowed under the program. However, we have concerns about the appraisal process. According to our real estate agent other people have tried to purchase the house using a standard FHA loan but they couldn't get it appraised because there are no comparable sales with the past 12 months. We also have concerns on the HVAC system - each room has a gas line and 1/3 of the rooms have individual gas heaters but no central heating/air. We have discussed our concerns w/ BoA, but the 203K mortgage specialist did not give us any assurances that that house could be appraised using other benchmarks. We're ready to have the 203K consultant came and inspect the house, but we're concerned that it cannot be appraised, so we would be wasting our time and money. Any suggestions?
You can convert the home into a duplex if the city will allow it so, that's where I would start first. You will have to reconfigure the heating system and maybe seperate the water and gas supplies to meet HUD requirements.
As a 203k Consultant here iin Atlanta, I have been involved with all kinds of 203k problems. Start with your local 203k Consultant. He will know the program better than anyone eles.
As a 203k Consultant here iin Atlanta, I have been involved with all kinds of 203k problems. Start with your local 203k Consultant. He will know the program better than anyone eles.