Posted by Jon_PA on 12/7/11 12:30pm
Msg #405968

203 k. Rehab loan ?

Has anyone done one of these loans. Is there anything I need watch out for? The title company said they would talk me through any questions, but I am interested in a notary's point of view.

Thank you

Reply by Teresa/FL on 12/7/11 2:44pm
Msg #405984

You will see a line item on the HUD for funds set aside in escrow to pay for certain repairs/improvements. There should be some documents in the package stipulating the deadline for the work to be completed and giving instructions to the buyers/borrowers regarding disbursement of the funds to the contractors upon completion of the work.

Not much different from the standard FHA purchase or refinance loan.

Reply by Victoria_NJ on 12/9/11 6:52pm
Msg #406179

Very much like a new construction loan

Base loan amt - payouts/draws as work is completed.

HUD may reflect a "hold back credit" which is a reserve(s) against the rehab work to be completed.

If the borrower is doing a 203K, they already know the terms and condition of the loan. You don't need to "explain" anything to them other then where to sign and date, IMHO.