203k Contractor in Greenville, SC
Looking for a 203k Contractor in Greenville, SC?
The Greenville housing market has become increasingly competitive, especially for those who aren’t in a position to make a cash offer. One strategy for getting your foot into a Greenville SC home is through Renovation loans. There are many types of Renovation loans available – FHA 203(k) loans, Fannie Mae HomeStyle Renovation loans, VA renovation loans, and Home equity loans. 203k loans are the most popular type of renovation loan due to their widespread availability. Our team has worked with all of types of renovation loans, but for this post, we’ll focus on 203k loans.
What is a 203k Loan?
Definition: An FHA 203(k) loan is a form of Renovation loan that allows the homebuyer to purchase a home with a single mortgage that combines the future renovation or repair cost with the purchase price of the home.
For Example, if you buy a 300K home and it needs 100K of repairs or remodeling, you can apply for a 203k loan of 400K. The bank will compare the appraised future value of the home with the purchase price and renovation cost put forward by the contractor. If the future appraised value supports the combined total, the loan can be approved, allowing you to finance both the purchase and renovations in one package.
Note: 203k Loans DO NOT cover DIY projects. Your 203k project must be quoted and completed by a licensed contractor. There is no specific certification for a 203k Contractor, but it’s important to hire the right type of builder – a licensed builder or licensed residential general contractor in the state of SC.
In the words of an Experienced Greenville Lender...
"I like to call the 203K rehab loan, “The triple win loan”.
→ The seller wins because they are able to sell the home even if their budget would not allow for needed repairs or upgrades.
→ The buyer wins because they get to purchase at a lower price range and end up with exactly what they want in a home.
→ The community wins because the property gets upgraded which increases property values in the surrounding area.
Win, win, win!”
Thomas Ray | Branch Leader at Movement Mortgage
Are 203k Loans only for First-Time Homebuyers?
This is a common misconception. Anyone can utilize an FHA 203k loan, as long as it’s for a primary residence. That means investment properties or flips aren’t eligible. There is one workaround for this rule: if you purchase a duplex, triplex, or other multi-unit property and occupy one portion of it, you may still qualify for a 203k loan.
203k Loans in Greenville, SC
For our area specifically, we’ve seen 203k loans used in a variety of scenarios:
- Getting into a Specific Neighborhood
Many families are searching for a specific type of neighborhood in Greenville, SC. Maybe it’s a neighborhood with a swim team, or a location close to school, or nearby family. But in many of these established areas, homes don’t come on the market often. And when they do, the limited inventory makes it hard to find one that truly fits your needs. A 203k Loan allows you to purchase in one of these neighborhoods and make the home fit your family’s lifestyle.
- Found the Perfect Home BUT…
Sometimes you find the perfect house, but it’s missing one key thing. Maybe it’s 3 bedrooms, and you need 4. Maybe you want to take out a few walls for a more open floor plan, or the kitchen needs to be remodeled. A 203k loan will allow you to finance these updates, and with the interest-only payments, you can live off-site until the renovations are complete.
- First-Time Home Buyers
Many homes at the starter-home price point in Greenville need a substantial amount of work. For those looking to become homeowners, the 203k loan can make homeownership more reachable for anyone with limited cash flow for repairs.
- Replacement Work
Maybe the home doesn't need a remodel, but the HVAC system needs to be updated, or the floors need to be refinished. Costs like this can add up quickly, sometimes totalling 10-20K or much more. If you don’t have that cash available, it’s a good idea to couple these costs into a 203k loan.
- Not Wanting to Cash Out Your Investment?
If you have the funds for a renovation but your assets are currently tied up in a high-yield investment that you prefer not to liquidate, bundling your home improvement costs with the mortgage could enable you to maintain those funds, ensuring they continue to work for you.
Advantages of the 203k Loan
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Most Competitive Interest Rate
By joining the cost of the home and renovations into a Primary Mortgage, you’ll likely get the most competitive interest rate. Interest rates are often significantly higher for Personal loans or home equity lines of credit.
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3.5% Minimum Downpayment
203k loans are very approachable because they offer a minimum down payment of 3.5 (for credit scores of 580 or more), similar to that of a conventional home loan.
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Interest-Only Payments Available
Some lenders offer interest-only payments during renovation. This allows you to pay only your current rent during construction, rather than covering both rent and a full mortgage at the same time.
Points to Consider
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Though the minimum down payment is 3.5%, note that any down payment below 20% will likely require FHA mortgage insurance–an additional fee on your mortgage payments.
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203k Lenders require a 10% Contingency for unexpected costs. For example, if your contractor quotes you at 50K, the loan will need to be for 55K. Ideally, at the end of the project, that 5k would go back towards the principal and not incur interest. This Contingency covers any Change Orders that may arise, if unforeseen damage is uncovered or you decide to add to the scope of work.
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If you use a 203k loan to add high-end or luxury features—like custom cabinets, premium appliances, or upscale finishes—the appraiser may not value your future home as highly as the total amount you spend. This is because the appraised value is based on what similar homes in the area are worth, and if nearby homes don’t have those same luxury features, the value of your upgrades may not be fully reflected in the appraisal. In this case, you would be responsible for paying the difference out of pocket, since the 203k loan will only cover up to the appraised future value of the home.
203k Project in Greenville, SC
Before
This homeowner bought a fixer-upper off Buncombe Road in Greenville, SC. Though it was in a great area, its unlivable condition made it very affordable. These folks found Ferguson Builders through their realtor and worked through the loan paperwork with our team and their lender. This required our team to develop a full scope of work and a fixed price quote for the lender to approve.
After
Once everything was approved, our team got to work. We were able to open up the floor plan, repair all mechanical systems (electrical, plumbing, and HVAC), and update the kitchen and bathrooms. Though many features in the home are new, we kept key architectural elements, including some of the original cabinets and hardwood floors. Because they financed the home and renovation with a 203k loan, they were able to fully renovate it before moving in.
Hiring a 203k Contractor in Greenville SC
Because of the painstaking process behind obtaining a 203k loan, choosing a 203k contractor is an important decision. Many times, a homebuyer will start the lending process with a contractor, only to realize later on that they are not properly licensed. Single-trades like roofers or HVAC companies are not licensed builders, and therefore do not qualify to complete a 203k loan project. Many licensed builders who are qualified may not want to deal with the quantity of paperwork involved in renovation loans.
As a Fixed-Price contractor, Ferguson Builders is uniquely qualified as a 203k Contractor in Greenville, SC. All of our projects, whether paid in cash or through financing, are planned line-by-line in advance. Every project is quoted with a guaranteed fixed price, which will not change unless the client requests a change to the scope of work. Our Process is ideal for 203k lenders because we are able to identify all the costs upfront and provide a detailed quote up front.
Ready to Renovate?
If you’re looking for a 203k Contractor near you, Contact Us today to start the conversation with a Project Planner!
If you’re searching for remodeling contractors in Greenville, SC, you already know there are plenty of options! Choosing the right one depends on your project, budget, and goals. Here are 10 essential tips to look for when hiring a contractor.
1. Determine if You Really Need a Contractor
If your project will only require a single trade – for example, if you need a drywall repair or have an electrical issue, hiring a contractor may not be necessary. Hiring that specific trade is usually the most cost-effective option. Ask friends and neighbors for recommendations, and verify that the person or company is licensed and insured.
2. True-Custom vs. Semi-Custom Builders
Early in this process, you will want to determine how much customization is necessary to make the space what you want. With a “rapid remodeler,” you may not have the option for a custom cabinet line, tile shower, removing a wall, or adding square footage. Anyone claiming that the project will be completed in just a few days or weeks will likely offer a limited list of colors, materials, and finishes. Ferguson Builders is a true-custom builder that allows you to select all your finishes -- making this space uniquely yours.
3. Finding a Trustworthy Contractor in Greenville, SC
Interviewing your contractor will help ensure they are qualified, trustworthy, and likable. You spend a significant amount of time with this contractor throughout the design and construction phases, and you want to ensure that you are working with someone honest, professional, and relatable. It’s critical to read reviews and testimonials from real clients. Read Ferguson Builder’s Google Reviews here and watch testimonials from our clients here.
4. Fixed Price or Cost Plus Contractors?
Are you hiring a Fixed-Price or cost-plus contractor? Will they define the full scope of work upfront? You should know exactly what is and is not included in your contract. Ferguson Builders will provide a clear scope of work with a fixed price, ensuring you understand from the beginning what’s included, how the finished space will look and function, and exactly how much you’re investing. Be sure to compare "apples to apples" when considering different contractors.
5. Check the Contractor’s Process
An experienced contractor will be able to create an accurate schedule for your project, so you know exactly what to expect. Check to see if they have a clearly defined process, from your first consultation, all the way to move-in day. Organization is key to success in your project being completed on time and within budget.
6. Is Design Guidance Included?
Choosing colors and finishes during a remodel can be overwhelming. You want someone who can help you design the space to be cohesive, functional, and complement your unique aesthetic. Questions to ask your contractor include:
- Do you have an Interior Designer on staff?
- How will I communicate my design decisions to you?
Make sure you will be able to see renderings of what the space will look like before starting construction.
7. Check the Contractor’s Warranty
Your contractor should offer a workmanship warranty, which offers protection for the new space. Review the details of the warranty to make sure you understand the terms and conditions.
8. Ensure Clear Communication
Observe how the contractor communicates. Is scheduling hassle-free? Do they arrive on time? Keep their commitments? These are early indicators of how communication will look for the duration of the project. Check that your contractor has a communication system to keep you updated on the project schedule, change orders, daily updates, selections, and financials. Ferguson Builders utilizes Buildertrend, an online portal for clients to communicate and access critical information on their project.
9. Who Will Be Working In My Home?
Even if your contractor has an in-house production team, trades like plumbing, drywall, and painting are often handled by subcontractors. That’s why it’s important to consider not just the builder, but also their relationship with those subcontractors. Look for a contractor who maintains long-term partnerships with trusted trades, ensuring your home is treated with care and the work meets standards. At Ferguson Builders, many of our trade partners have worked with us for 5–10 years, making them a true extension of our team.
10. Properly Licensed, Bonded, and Insured
Does the contractor have a state-issued license that covers all work being contracted? A licensed builder is also required to carry a surety bond, which serves as protection for you. Make sure they have Workers' Compensation and General Liability Insurance. These insurance policies protect you if a worker gets injured at your home or if the contractor damages your property.
At Ferguson Builders, we’ve been serving families in Greenville, SC, and the surrounding upstate since 2010. We take pride in transforming homes from small Bathroom Remodels to Whole Home Remodels and large-scale Additions. Ready to start your remodel? Contact Ferguson Builders, a trusted remodeling contractor in Greenville, SC, to schedule your consultation.
