Loan Approval- The first step to 203k is a full approval of the buyer. The buyer will submit all income, asset and credit documents to Titan Home Lending. The buyer will be approved for a loan amount within 24-48 hours and this approval will be provided directly to the Realtor. This approval will include all the information needed to write a contract. CLICK HERE for our downloadable Word application or CLICK HERE to apply online.
Buyer is approved for a loan amount.
Property Screening- Realtor and buyer coordinate what neighborhood, school district, location and desired price range (note that property size and condition are not included). The 203k allows the owner to increase bedrooms, bathrooms, family rooms and garages and almost any improvement is allowed in an FHA 203K.
Contract on property- The buyer writes a contract on the property subject to the terms of the approval. CLICK HERE for Sample Contract.
203k Inspection/4 Point Inspection and Contractor Estimate- The buyer should schedule a 203k inspection with a HUD certified consultant and schedule a 203k approved contractor to meet at the property at the same time. We will be happy to give you a list of contractors that we have worked with in the past that did a great job if interested. If the age of the home requires a 4 point inspection for insurance, the buyer should also schedule at this time (most 203k consultants also are approved to do 4 point inspections for insurance). For a list of HUD certified 203k consultants CLICK HERE
Contractor submits estimate to 203k Consultant- The 203k consultant will coordinate with the contractor the scope of work and all costs in the project and forward to the buyer and Titan Home Lending, LLC. The contractor must provide: license, liability insurance, and Workman’s Comp or Exemption Letter, a W-9 form and a resume (including 3 trade references and 3 past customers).
Home Insurance Quote- Home insurance is required for every property and renovation insurance for a property in as-is condition is difficult. Please contact us if you need help finding insurance.
Appraisal ordered through AMC- The “After-Improved” or “As-Completed” appraisal will be ordered with the contract and 203k Specification of Repairs. This process takes 10-12 days.
Loan is submitted to underwriting- This process typically takes about 14 days to underwrite and approve the loan. To expedite this process, please be prepared to gather additional documents that the underwriters request in a timely fashion.
Clear to Close/Quality Control- Once your loan is approved and you have provided all the conditions to the underwriter, it will take 3 business days to clear the conditions and perform QC on the loan. They will need to verify your employment by phone 5 days prior to closing.
Closing- Closing can only be scheduled after the loan has been “cleared to close” and instructions are sent to the title company within 3 business days. Some sellers/banks/short sale lenders require a few days to approve the closing documents. When approved, you close within a few days. At that time, you own the home (in as-is condition) and the seller gets their proceeds. We set up a repair escrow account which includes funds for repairs, contingency reserve (10-20%), inspection fees and title updates.
Renovation Funding- In a “Streamline 203k” you will get a joint check at closing payable to the buyer and the contractor for 50% of the repairs. You will need to sign that over to the contractor as soon as possible to start the work. In a “FULL 203k” the contractor gets paid as the work gets completed (1-5 draws paid as the work gets inspected).
Renovation Repairs- The contractor must start repairs within 30 days and has 180 days to complete them. DO NOT MOVE IN IMMEDIATELY! Keep your old housing for at least 30 days to allow the contractor to complete the work before you move in. You do not want contractors in your home, moving your furniture, dealing with your pets, working around your schedule. This is a JOBSITE! Dust and construction debris destroy everything. Let them get in, do the work, clean the property and then move in.
Housewarming Celebration to Show Off Your Newly Renovated Home!