“Why Do a 203K When the Home Needs NO Repairs?”

“Why Do a 203K When the Home Needs NO Repairs?”



You just can’t make this up! I gave my clients a pre-qualification letter for an FHA loan. It was for a property that was being sold in “as is” condition, therefore the bank holding title wouldn’t accept a regular FHA prequalification. They would only accept an FHA 203K or conventional prequalification.  


The selling agent didn’t know what to do as unfortunately the clients didn’t qualify for a Conventional loan because of their debt ratio. This makes no sense to me to do a 203K loan when there are no repairs needed.


 It is very frustrating to be put in a position to come up with at least $5,000 worth of repairs and appliances, but that is what we need to do to get past the issue. How crazy this business can be.


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Comment balloon 29 commentsJoe Petrowsky • March 29 2016 11:11AM


I would originally finance as a 203K and after the appraisal (if no repairs noted) do a change of circumstance to a 203b.

Posted by Mark Robinson, Honesty, Integrity, Service (Geneva Financial, LLC) about 3 years ago

Good Morning Joe - just another example of the problems of over regulation.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) about 3 years ago

Great information and blog...thanks for sharing!

Posted by Norma J. Elkins, Realtor - Elkins Home Selling Team ( Elite Realty Group) about 3 years ago

Good morning Joe. Financial institutions are not the bedrock of intellectual brilliance. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) about 3 years ago

Hi Joe.  Are you forgetting that when it comes to common sense, sometimes the big box corporations have seem to having lost theirs

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 3 years ago

Joe, I often  learn some interesting  things from your post. 

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 3 years ago

Hi Joe.  Common sense and governmental regulations are mutually exclusive.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) about 3 years ago

Not my area of expertise, so I'm not real sure of the issue.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) about 3 years ago

You have to wonder whose running these establishments...

Posted by Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400, Long Island Home and Condo Specialists (The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803) about 3 years ago

Maybe the lien holder is insisting on a 203K on this "as is" property as a "C.Y.A." to hide behind in case of litigation later when the borrower discovers a severe deficiency in the future Joe Petrowsky .   

Posted by DEANNA EARLY - - ( NMLS # 268590 ), Highest Ranked Mortgage Loan Originator Virginia (American National Bank & Trust) about 3 years ago

Good morning, Joe Petrowsky I'm sure you'll rectify all of this.... that's why it ended up in your lap...

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) about 3 years ago

Joe, I would be confused too, and wonder why this requirement would be put into place.

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) about 3 years ago

Good morning, Joe --- I'm sure you can find an acceptable workaround for most situations you encounter.  Good luck.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 about 3 years ago

Perfect time to do some upgrades like hardwood flooring and new light fixtures. There is your $5000 right there. Have a wonderful day Joe.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) about 3 years ago

Good morning Joe. It is pretty crazy. I guess you see it all. Enjoy your day.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) about 3 years ago

Hi Joe... everytime I think I've heard everything in this business something new and odd pops up. Obviously, same at your end of our real estate world.

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Residential Brokerage ) about 3 years ago

Ah Joe Petrowsky I think that this is great. The new homeowners will get to have a remodeled kitchen or bath, or whatever else they want.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) about 3 years ago

One thing that is always the same in real estate world. It is never boring!  

Wishing you a great day ahead.

Posted by Anna Hatridge, Missouri Realtor with Goodson Realty (Goodson Realty) about 3 years ago

Hello Joe Petrowsky 

Conrad Allen already beat me to my comment...

Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) about 3 years ago

Joe, that puts everyone through a lot more work for unnecessary reasons.  Somethings make no sense some times.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) about 3 years ago


The government rules---asinine, defy logic, etc...I know you will solve it.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) about 3 years ago

Wow! This is an interesting situation to share. It may be time for a new roof.

Posted by Roy Kelley (Realty Group Referrals) about 3 years ago

That is crazy...just because the house was listed as being sold as it?

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) about 3 years ago

It sounds crazy Joe, but with your experience you will get the job done, as always.

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate (Vision Quest Realty) about 3 years ago


Sometime we have to be creative to make a sale work.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 3 years ago

Is this dishonest Joe?

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) about 3 years ago

Joe, this is incredible...please follow up with us on this crazy loan!

Posted by Ginny Gorman, Homes for Sale in North Kingstown RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) about 3 years ago

Another one of those head scratchers.  Conrad Allen has it right!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) about 3 years ago

That makes no sense, and aside from the appliances, replacement windows or an upgrade to a high efficiency furnace would make the most sense

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 3 years ago