203K and CHFA, Good Combo 0
When you think about FHA 203K loans, what comes to mind? How about when you think of CHFA? Maybe some of the following thoughts come to mind: Too much hassle, Extra paperwork, Takes too long, I can’t say that I blame you for perceptions that you may have been told are real or that you have even experienced. How would you feel if I told you that we can combine the two and do a 203K using the CHFA Down Payment program?
Maybe you are asking yourself what a 203K loan is or what is CHFA. So quickly here is a rundown of these two programs. A 203K is an FHA loan program that allows a buyer and seller to close on the sale of a property that might need some fixing up, sprucing up, or flat out redoing. You can close on the property in it’s current condition and then have money set aside for doing the work after the closing. Obviously there are more details but that is the jist of it. The CHFA program allows a buyer that meets certain criteria to get some help with the down payment. This assistance does not come from the seller but rather a small 2nd mortgage to assist with the 3.5% down payment of an FHA loan. CHFA is in essense, a non-profit bank that purchases loans and services them and is specifically for low to middle income buyers that need a little help with the down payment.
These two programs combine to get folks the help they need with the down payment to be able to buy distressed properties that need some fix up. Obviously, this tends to be a more involved process then a regular purchase loan but the benefits clearly outweigh the extra hassle and if you work with a lender that has a long history with both CHFA and 203K loans, (this is where I drop a little hint that Universal Lending and I meet that criteria) then that process is made even easier.
As I said before, there are more details that you and your buyers need to be aware of so feel free to contact me with any questions but it is just one more tool for you to use to help more buyers.