Wednesday, November 5, 2014

Self Help Under the FHA 203k Loan Guarantee Program

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Yes, there is a provision for "self help" under the FHA 203k program but they aren't carte blanc. Some lenders allow self help ONLY if the borrower is a licensed contractor in the state where the project is located. Many lenders DO NOT ALLOW SELF HELP at all, under any circumstances.

203k Self Help project

To make a long story short, it isn't advisable to use the self help provision of the program as most lenders that might allow you to do self help will make the accounting so difficult that it just doesn't make sense. Too much paperwork and accounting.

In any case if you should find one that allows you to do self help you cannot be paid for your labor, this is not a cash out program. You can be reimbursed for your materials cost but NO LABOR will be paid out instead it can pay down on your mortgage.