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  - 203K Guide 101

Apply for a 203k home repair loan

 Ordering an Appraisal

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ordering an 203k appraisal

Before ordering an appraisal, the following documents must be submitted to Sun West:
  - Contractor Bid
  - Architectural Exhibits
  - Consultant's Work
Write-Up/Specification of Repairs
  - Truth-In-Lending Disclosures

An After-Improved Value can be estimated once the mortgagee provides the appraiser with the information regarding the proposed rehabilitation or improvements and all cost-related estimates.

The appraiser will indicate an After-Improved Value in the Appraisal Report that is subject to completion of all proposed repairs and/or improvements.

The Appraisal Report must include a description of the proposed repairs and/or improvements as well as the Contractor's estimate.

The lender will always direct the appraiser to provide an opinion of the After-Improved Value. In some cases, an As-Is Value will also be required.

If the lender determines that an As-Is Value is not necessary, then an As-Is Value can be determined with one of the following (as long as the results do not exceed a reasonable estimate of value):

1. The contract sales price on a purchase transaction

2. The existing debt on a refinance transaction

An As-Is appraisal is not required to establish the maximum mortgage for a HUD-owned property. Instead, a Direct Endorsement (DE) Lender may request the HUD Field Office to release the HUD Property Disposition appraisal to the lender.

The lender can use HUD appraisal if:

  - The appraisal is not over one year old prior to the bid acceptance from HUD;

  - The sales contract price plus the cost of the rehabilitation does not exceed 110% of the "As Repaired Value"(shown on the HUD appraisal).

If the HUD appraisal is insufficient, the DE Lender may order another appraisal to ensure the purchase of the property is feasible with the property's current market value.

Similar to a borrower purchasing a 203(k) insured loan as a first mortgage, homebuyers who purchase a property with cash can refinance the property using a 203(k) loan within 6 months of purchase.

 - Evidence of interim financing is not required; the mortgage calculations will be done the same as a purchase transaction.

 - Any costs related to a 203(k) loan, such as a down payment and closing costs, will be subtracted from any cash back amount allowed to the borrower.

A copy of the Sales Contract and the HUD-1 Settlement Statement must be submitted to verify the accepted bid price (As-Is Value) of the property and the closing date.


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Sun West Mortgage Company holds over 30 years of lending experience with a reputation of providing excellent customer service.

At Sun West, the complete loan cycle is processed in-house. From origination to underwriting and servicing, Sun West ensures you receive a simpler, faster, more direct borrowing experience with no back and forth intricacies. To see if you are pre-qualified or to obtain more information, call (866) 740 3677.

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