What Can Delay Your FHA 203(k) Rehab Loan
July 7, 2023
Some things can delay your FHA 203(k) Rehabilitation Loan, and not just the obvious issues like applying for more credit after you’ve applied for a mortgage or having a major change in FICO scores after initial loan approval.
There are issues to be aware of before you hire a contractor, sign a mortgage, etc. Some of these issues aren’t applicable nationwide. Others may affect “most” borrowers. What do we mean?
Permit Processing Times
Some states have efficient processing for building permits. Others are so backlogged that it can take months to approve your application.
Beware of a permit backlog. You’ll want to ask how long it takes to get your required permits and know what timeline you might be subject to.
People who want to build or renovate in rural America may not experience this issue like someone renovating a house in Southern California. Your local housing market will determine your waiting times when permits are concerned.
Supply Chain Issues
Are the finishes you want on backorder? Will your new countertops be delivered promptly or will you have to wait? Do you require an electronic part that is also on backorder or is delayed due to supply chain problems?
This is a conversation more people have had since the COVID pandemic, which seriously affected not only the distribution of supplies and materials but, in some cases, their manufacture.
Installation Issues
Some who have homes renovated discuss their regret at not being present for certain types of installations. Do you have a light fixture you want in a specific place?
If you cannot be present for a crucial installation, be VERY specific with the builder about what you want and where you want it. Otherwise, they may feel compelled to choose for you and if you don’t like their choices, the repair and repositioning or other added work could push both your deadlines and your budget.
Budget Issues
It pays to know how close you are to exceeding your budget and why. Don’t let cost overruns slow down or stop your project. Make your budget and beware of cost creep, where you decide on the pricier option in one area but don’t address the change in the budget in other areas. Agree to too many slightly higher-priced features, and you may wind up accidentally over budget.
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RELATED VIDEOS:
Let's Talk About Home Equity
Understanding Your Loan Term
Analyzing Your Debt Ratio
There are issues to be aware of before you hire a contractor, sign a mortgage, etc. Some of these issues aren’t applicable nationwide. Others may affect “most” borrowers. What do we mean?
Permit Processing Times
Some states have efficient processing for building permits. Others are so backlogged that it can take months to approve your application.
Beware of a permit backlog. You’ll want to ask how long it takes to get your required permits and know what timeline you might be subject to.
People who want to build or renovate in rural America may not experience this issue like someone renovating a house in Southern California. Your local housing market will determine your waiting times when permits are concerned.
Supply Chain Issues
Are the finishes you want on backorder? Will your new countertops be delivered promptly or will you have to wait? Do you require an electronic part that is also on backorder or is delayed due to supply chain problems?
This is a conversation more people have had since the COVID pandemic, which seriously affected not only the distribution of supplies and materials but, in some cases, their manufacture.
Installation Issues
Some who have homes renovated discuss their regret at not being present for certain types of installations. Do you have a light fixture you want in a specific place?
If you cannot be present for a crucial installation, be VERY specific with the builder about what you want and where you want it. Otherwise, they may feel compelled to choose for you and if you don’t like their choices, the repair and repositioning or other added work could push both your deadlines and your budget.
Budget Issues
It pays to know how close you are to exceeding your budget and why. Don’t let cost overruns slow down or stop your project. Make your budget and beware of cost creep, where you decide on the pricier option in one area but don’t address the change in the budget in other areas. Agree to too many slightly higher-priced features, and you may wind up accidentally over budget.
------------------------------
RELATED VIDEOS:
Let's Talk About Home Equity
Understanding Your Loan Term
Analyzing Your Debt Ratio
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