Ask if your loan officer is currently working on other renovation loans and if their bank has a dedicated department to funding these loans and servicing the contractor post-closing construction process.

The most important factor to consider when choosing a 203k lender is recent experience.

You want a true renovation lending partner who is currently working on 203k or other types rehab loans, and who funds those loans through lenders that have the back office infrastructure to process, underwrite and fund 203k loans.

Lender guidelines and processing systems are rapidly changing as higher interest rates put pressure on mortgage companies to trip department staff and support. Make sure that your “experienced” loan officer is working with a 203k lender that is still committed to providing excellent service for renovation loans.

While the credit and income component of approving a borrower for a rehab loan is the same process for most traditional mortgage programs, the difference with the renovation lending process is how the property, contractor and appraisal is evaluated.

This is why it is important to work with an experienced FHA 203k lender, regardless if they are down the street from you or across the country.

Video Transcript
Somebody in here said that they used a 203K loan a couple years ago, for their own home. The home that they were going to live in. They said it was a hassle, but in the end it was worth it. Can’t disagree there, a lot of times these loans can be a hassle. I think a lot of it comes down to the team you’re working with. So, that’s one of the first things, and we’ll talk about that in one of our upcoming podcasts. How to select the right lender. How to select the right HUD consultant. How to select the right contractor. Really giving you guys detailed information and steps on how to do that. But, right now, we’re just going to really talk about these questions. This person also said good luck finding a mortgage company that will do 203Ks. Very few lenders will do them anymore. Again, I’m going to call wrong on that one. Lenders, more than ever right now, are getting into renovation and construction because with volumes being down, they’re trying to expand into areas in which they could become an industry leader. Now, that’s important, but it’s … It’s good, and it’s bad, right? Because you can have guys that want to expand into an area, and they want to really show you, and they want to start using additional products to be able to do better for them and their company and their clients. But, at the same time, if they’re not doing it the right way, you’re becoming a guinea pig. So really, what you want to do is, you really want to understand the lender that you’re working with and understand how many 203Ks, and how many homestyle renovations and construction loans they’ve done. And then use that as a sort of, as an idea to, kind of as a starting point. Secondly, there’s always great ways to go out there. You go out to Facebook, and all the other social media platforms and ask for, ask for reviews. Ask for guys who’ve done them. Come to BiggerPockets, ask them specifically for people who have a good lender in the area. And that’s another thing. You do not have to have a lender specifically to your area. It’s more important to have an experienced lender that understands the product. And, it doesn’t matter if he’s working in Alaska, and you are in Florida. As long as that person has the experience level, that’s key component for you. It does not matter if they’re not around the corner and you can’t go and walk into their office. That really has no bearing on anything anymore. Focus on experience. Experience is key. Listen, thank you so much guys. I really appreciate you being here today on this podcast and this vlog. Renovate this.