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What are alternatives to FHA 203k program - Can you buy with FHA, then get a heloc?

I wanted to do a 203k streamline but have read horror stories on the internet and even lenders who offer it says no one has had good experiences with it.  What are alternatives?  My goal is to buy the house and then put ~$30k of work in to it.

Can I buy using FHA, then immediately get a HELOC for any equity I have in the house and use that?

Other options?
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November 05 - US
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Profile picture for CA UMB
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Since January 2009

If you are going with an FHA loan this normally indicates a minimum down payment. With a 203K you are also financing the improvements. If you have any equity it would be exremely minimal. I do not feel you will find a lender for a HELOC. The risk is too large.
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November 18
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Yes, sometimes people only hear the horror stories but not the good and delightful stories. The horror stories usually are more of an interest to everyone. Need to just seek out a 203K lender who knows what they are doing since that is just about the only program that would give you money for fixing up your property right from the beginning.
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November 18
Hi Devon,

Andrew is correct in stating that any horror stories you hear would be a result of the person not knowing what they are doing. I have done about 8 203K loans myself and as long as they are structured properly, they can close within the same time frame as a regular purchase.

203K as you may know allows anywhere from $5k to $35k in repairs to the home. These repairs must be justified though and cannot be used for luxury type additions (i.e. a swimming pool). As for buying the home and then getting a HELOC...it is doable, but i would be concerned about getting the FHA financing to begin with if the house is damaged at all. FHA appraisals are a bit more extensive and require certain things before approving. It may require fixtures before closing at which point, you would be looking at a 203K :) . I hope this helped. Feel free to email me at ReedLovejoy@gmail.com with any further questions or to discuss over the phone. Thank you.
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November 18
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Since January 2009

The horror stories are a result of loan officers that don't know what they are doing attempting to do them because they have access to the program...

203K loans are a specialty loan program and you need to go to someone that specializes in that loan program.

If you have a heart condition you don't go to a brain specialist...not that what we do can be equated to that but you know what you know!
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November 05
 

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