Short Sales and FHA 203k Loans....Real Estate’s Vinegar and Oil

Short Sales and FHA 203k Loans....Real Estate’s Vinegar and Oil

Seriously, are Short Sales and FHA 203K Loans mutually exclusive? Much like Vinegar and Oil, they will never blend together effectively?

Anyone who knows me, or my blogs, or my comments on the advice forums knows I am a HUGE advocate of the FHA 203K renovation loan program. I really do believe home buyers, sellers, real estate agents and contractors are leaving a lot of money and opportunity on the table by not embracing and garnering knowledge about the benefits of the FHA 203K program.

I have been impressed with Broker Bryant’s insight and knowledge of the real estate industry since joining ActiveRain over two years ago. Even more impressive is his willingness and desire to share his vast experience with other’s in the real estate industry.

Recently BB shared a wonderful post on some very valuable tips for successful closings of short sale properties. Now, mind you, I am not a practicing real estate agent (hey, I do have a California DRE license....I have passed the tests and taken the CE units....I am an “almost agent”, right?.....Hey, I am just kidding!). DRE License #01865815

What struck me on the post AND the comments was the example: “If it needs a new HVAC system a Buyer will not be able to use FHA financing.Vinegar and Oil”.


Think third grade and the smarty pants nerd who immediately starts squirmy in their seats and pumping their arms up and down frantically....”PICK ME, PICK ME, PICK ME!....I KNOW THE ANSWER! REALLY, REALLY, I DO!”

But, no one wants to hear the answer from Ms. Smarty Pants. No sirree....that property has a problem with the HVAC (Vinegar) and FHA (oil) is not going to mix with it at all.

BUT....BUT....BUT....What about a FHA 203K Renovation Loan? Why not? Why not even consider it? Many, many 203K can close just as timely as any Conforming or FHA loan. Heck, a complete new HVAC system would most likely fall under the parameters of a 203K Streamline (35K maximum, no structural work) and no GC (general contractor) needed. A simple call to your local HVAC business, an estimate and an appointment for installation is pretty inclusive of the “fix”.

So, am I missing something? Why would anyone want to risk losing a sale (or a purchase) over something as simple as a new HVAC system? And, mind you, I am all over the idea of complete renovation projects to custom design property’s to the new owners specifications. There IS a beautiful home hidden in some very ugly properties.

Sure, Oil and Vinegar do not meld very well; however, add a few herbs, salt and freshly ground black pepper. Toss with fresh crisp romaine lettuce, heirloom tomatoes and some feta cheese and you will have a pretty awesome meal.

Try mixing your Real Estate Oil (Short Sale) with FHA 203K Loans (Vinegar) and I think you will be pleasantly surprised with the very tasty outcome....A Closed Transaction!

This licensee is performing acts for which a real estate license is required. C2 Financial Corporation is licensed by the California Bureau of Real Estate, Broker #01821025; NMLS #135622. Loan approval is not guaranteed and is subject to lender review of information. Loan is only approved when lender has issued approval in writing. Specified rates may not be available for all borrowers. Rate subject to change with market conditions.
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The services referred to herein are not available to persons located outside the state of California Washington, Oregon and Texas.

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