Archive for FHA 203K Renovation
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It’s no secret; interest rates are excellent right now. They are hovering near all time historical lows. Homeowner’s all across Atlanta and the rest of Georgia are cashing in on this opportunity and lowering their monthly payment, fixing their adjustable rate mortgage or consolidating debt. Many Atlanta homeowners, however, also have some renovation needs they’d like to take care of as well. However, due to lower loan to value’s and declining property values they don’t think they have the room pull the cash out and go to work. Stand corrected homeowners in Georgia! Intro the FHA 203K for refinance!
So, why is FHA 203K better than a traditional cash-out refinance? That answer is SIMPLE. We use up to 110% of the AFTER REPAIR VALUE to determine your loan amount instead of the traditional AS-IS value you would get on a normal cash-out refinance. Using after repair value gives you way more room to work with. While FHA 203K refinances do have a few caveats (upside down borrowers need not apply) for the most part they will present an opportunity for you do your needed renovations, add more square footage and just do a general gussying up of your house. Want to know more? Contact us today and we’ll discuss all the details of how the loan works!
APPLY NOW for Your FHA Georgia 203K Loan!
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The Peters Team out of the Keller Williams office in North Buckhead / Brookhaven are top notch. They know their stuff and if you are buying in that area you’d be well served giving them a call. Here is a recent post of theirs about their last 203K transaction.
http://lesleypeters.com/2010/05/
Just blogged on our new first-time home buyers, Jason and Brooke, who took advantage of this Atlanta real estate market and purchased a home that needed renovation. Check out the blog by clicking here. Got my mind to thinking… We haven’t written a new Atlanta 203k blog post in quite some time. Here’s the old one: click here.
So, let’s take a new look at 203k (not much has changed):
Many buyers want a good investment opportunity in this down market and hope to buy a distressed property (foreclosure, short sale, or even an estate owned home) that needs TLC. Problem is, if a home is in need of a lot of repairs, the bank won’t loan the money unless the home is repaired. We run into this often. A home has no appliances or the roof has a major leak… the buyer can’t get a loan until they spend the money to make the repairs. And, who in their right mind wants to spend money on a home that they have yet to purchase? You see the issue!
Now, 203k can come to the rescue! A 203k loan enables you to purchase a property and include in the home’s loan the cost of renovating, repairing, or improving the property. The loan is an FHA product and requires approximately 3.5% down on the home + repairs/improvements.
Many people ask us if this is an investor loan. No, this is not an investor loan. This FHA 203k product is for hombuyers that are going to occupy the home.
Here’s the process:
1. Call us and let us help you find a home that would be a good candidate for a 203k loan! The Peters Company at Keller Williams Realty Peachtree Road 404-419-3619
2. Find a 203k loan officer – we can help you with this as we’ve had lots of experience.
3. We’ll then write an offer to purchase the property you’ve found inlcuding verbiage that the financing is FHA 203k and contingent upon financing and repairs required by FHA.
4. Choose a vendor/contractor that can draw up a proposal of the work done and give an estimate on the project (individualized and in it’s entirety). Haven REI is an approved FHA 203k vendor and very familiar with the process.
5. An appraisal is ordered to determine the home’s value post-renovation.
6. The loan closes to cover the purchase of the home as well as the repair/renovation costs. The seller receives the payoff for the property and the funds to renovate/repair are placed into an escrow account to pay for repairs/renovations during the rehab process.
7. The rehab project begins and the contractor/vendor is paid through draws as work is completed.
8. You own a home that is repaired and renovated to your own desires! And, most likely, have made an excellent investment decision!
If you’d like to learn more about the Atlanta FHA 203k process and loan, give us a call. We can help you get started and put you in touch with an FHA 203k loan officer specialist who can answer all of your questions!
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With the economy flat and home prices stagnant people are looking to get more out of their renovations. Whether it is a FHA 203K purchase or a Fannie Mae Homestyle refinance, going green with your new renovation will pay dividends for years to come. Whether your goal be energy savings, an allergen free home or saving the planet; here are 5 fresh ways to go green on the next face lift for your home.
1.) Natural Linoleum
Recyclable, long lasting and glue free; natural linoleum is asthma / allergy friendly. Simple dry dusting can prevent allergens and keep your whole family allergy free.
2.) Cotton Fiber Insulation
Treated to resist fire, containing no irritants and can be manufactured from recycled blue jean scraps; this is as green as it gets.
3.) Mold Resistant Wallboard
You can purchase affordable moisture resistant Gypsum wallboard that greatly reduces mold risk and promotes indoor air quality.
4.) Cool Metal Roofing
Did you know that metal roofs last two to three times longer than shingles? They also can save 30%+ on cooling costs and are resistant to hail, wind and fire. Energy savings and safety, that is a win win in my opinion.
5.) Energy Efficient Windows
Energy Star windows typically lower energy bills 10% – 25% by reducing heating and cooling loss. As an additional benefit laminated glass reduces noise and stays in place in broken. Another energy and safety winner!
Whether you are purchasing or refinancing you need to explore FHA 203K & Fannie Mae Homestyle renovation financing. Renovation financing allows for use of up to 110% of the AFTER repair value which provides you with more room to do the green renovations you need to save money, make your home allergen free and save the planet!
APPLY NOW for your FHA 203K or Fannie Mae Homestyle renovation loan!
See the original post on the industry leading MyFHABlog.com
http://www.myfhamortgageblog.com/2010/01/5-more-ways-to-go-green-with-fha-203k/
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FHA 203K renovation loans have been around for decades, but they have recently found a new use in helping people go green. FHA awards benefits in terms of higher allowable debt to income ratios along with loan amounts that can exceed FHA statutory limits. So, how can you use the FHA 203K to go green?
1.) Green Up Your Appliances – FHA 203K loans will finance new free standing appliances for your home. Why not use that opportunity to buy EPA recommended ENERGY STAR appliances? Imagine beautiful stainless appliances that save you a bundle in monthly energy costs.
2.) Save Water, Save Energy — You can finance brand new low flow toilets as well as tankless water heaters. Low flow toilets use less than half the water that older models do and tankless waters provide unlimited hot water without all the wasted energy of a constantly working water heater.
3.) Want New Hardwoods? — Opt for sustainable bamboo flooring. Bamboo reproduces itself to maturity in 5 years as opposed to the 40-100 years than normal hardwoods take. Make sure and opt for formaldehyde free glues.
4.) Solar Panels — Solar is one of the easiest ways to dramatically cut monthly energy bills. Installing solar panels is so encouraged by HUD that they will allow you to exceed statutory loan limits to do so. In many cases the Federal, State and Utility company tax credits will pay for a good portion of the purchase and installment of solar panels. The rest we can finance.
5.) Insulate! Insulate! Insulate! — An obvious choice for a green home, insulating your home better can help you save thousands on energy bills. This should be a given on any green renovation using FHA 203K financing.
6.) Choosing Green Building Materials — A key aspect of any green FHA 203K renovation is the selection of environmentally friendly building materials. To reduce transport pollution and energy costs go local first. The second thing to look for is recyclable materials such as Glass, Terrazzo, Ceramic and Porcelain.
Now is the time, do you part and save yourself some green by going green!
Click HERE to get started on your FHA 203K renovation financing!
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There is a huge demand for FHA 203K loans in the Georgia mortgage market and throughout the Southeast. That demand has prompted a lot of unqualified lenders and loan officers to attempt to grab their piece of the pie. This loan is not for rookie, it requires experience and expertise. Your choice of lenders is extremely important when pursuing a renovation loan. You need to research and you need to ask your potential lender the right questions. Here are the three most important questions to ask your 203K lender.
1.) How Many Renovation Loans Have You Closed?
The answer should be at least 20 minimum. As I said above, FHA 203K and Fannie Mae Homestyle renovation loans require experience & expertise. There are caveats, there are gotchas around every corner. I’ve closed 150 renovation loans and I still get surprised by underwriting requests.
2.) Who Services the Loan?
Who is responsible for disbursing the funds? Do they do so in a timely manner? If Bank of America is servicing the answer is no. They take months to disburse. Avoid like the plague any lender relying on them for servicing unless you want to have angry contractors knocking at your door. On streamline 203K loans the first draw should be disbursed within 2 weeks of closing. On full 203K loans and Fannie Mae Homestyle loans funds should be disbursed within one week of the draw request.
3.) Do You Offer Both FHA 203K Loans & the Fannie Mae Homestyle?
Why does this matter? I just need a streamline 203K. It matters because there are numerous items that can flip a streamline 203K to full 203k or flip a FHA 203K to a Fannie Mae Homestyle. I outline a few of the biggies HERE. If your lender only offers the streamline 203K and you need to flip to the full 203K you have an issue. Make sure your 203K lender has access to the full array of renovation financing.
Renovation loans are one of the most useful products on the market right now and we dominate our 203K market. They are not easy loans, your selection of lender is extremely important. If shop solely on rate or go for the cheapest GFE then you will get what you pay for. Choose your renovation lender wisely!
Apply for YOUR FHA 203K of Fannie Mae Homestyle Renovation Loan NOW!
Call 404-551-3845
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I get lots of questions about renovation loans and which one is the right a particular situation. Many people are quickly becoming familiar with the FHA 203K, but not so many know about its conforming sister the Fannie Mae Homestyle. So, when is the Fannie Mae Homestyle the right loan?
1.) Unfinshed New Construction — FHA 203K loans require a certificate of occupancy (known as a C.O.). This is a nearly impossible request on unfinished new construction foreclosures. This makes FHA 203K loans virtually impossible on unfinished new construction foreclosures. This is where the Fannie Homestyle comes into play. The Homestyle only requires homes be “substantially complete”. What does that mean? Well, it is open to interpretation, but anything with the systems in place that is at least 75% complete might be a good candidate for a Homestyle.
2.) Loans Exceeding FHA Loan Limits — If you are over local FHA loan limits and need to do a renovation loan then your clear choice is the Fannie Mae Homestyle. In most places across the US conforming loan limits exceed those of FHA. For example, in Atlanta FHA loan limits are $346,250 while Fannie Mae Homestyle limits are $417,000.
3.) Borrowers with 20% Down — FHA 203K loans have mortgage insurance for 5 years regardless of the amount you put down (30 Yr fixed rate). It is possible via the Fannie Mae Homestyle to put 20% down and to avoid mortgage insurance entirely.
4.) Non-Owner Occupants — FHA loans require you to occupy the residence as your primary residence. Fannie Mae Homestyle loans will allow your to renovate a residence as a 2nd home OR AN INVESTMENT PROPERTY!
5.) I Already Have a FHA Loan! — Already have a FHA loan? Chances are you won’t be able to get another. Look at the Fannie Mae Homestyle to renovate if this is your situation.
There are certainly more situations where the Homestyle is a more appropriate loan then a FHA 203K. Consult a knowledgeable Renovation Loan Specialist to determine what is best for your situation. We are here to HELP!
APPLY NOW FOR YOU FHA 203K or FANNIE MAE HOMESTYLE RENOVATION LOAN!!
Good Luck!!
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Short answer: it’s either ignorance on the seller’s part, or the property cannot pass the FHA inspection that is required.
Long answer: Lately, FHA loans are harder to finish and close. There is a set of FHA rules. In addition to those rules, “investors,” the entities that buy the “paper” on Wall Street, can add their own “over-lays” to the rules. For instance, if an investor decides that anyone below a 620 credit score is too risky for their appetite. Well, no one can make them buy a loan with a 580 credit score borrower. Therefore, no lender will tolerate a loan on their books that can’t be sold to provide liquidity (cash) at some point. They won’t do the loan, even though “the rules” may allow for it. Seller’s get nervous at the time-frame needed to close because there are lots of little details to pay attention to.
Sellers may feel that an FHA borrower is inherently more risky. That is not true. It simply takes a broker with FHA experience and current working knowledge to know whether or not the file is doable from the get-go. In fact, as mortgage insurance companies increasingly stop insuring conventional loans with less than 20% down payment, by the time a seller can actually find someone with that much cash, you could have already closed your FHA loan! Simple ignorance, in many cases.
If the property can’t pass the inspection, you can easily do the FHA 203K rehab loan. Sellers get nervous over the extra length of time these can take…but if the property is in bad condition, by the time they find someone with 20% AND enough cash to fix it…hello, you’ve already closed your FHA loan. Simple ignorance.
FHA loans are no magic pill…they can take longer to close. But there is no better medecine for this ailing lending market than only 3.5% down payment, 6% allowable contribution from the seller and an option to finance repairs right into the original loan.
If you’re in Georgia and looking for a FHA Loan or FHA 203K Loan then call me. If you are in California than call my friend and fellow loan officer Brian Wiesner. We know our stuff and he knows his! Here is his original post from the best FHA site on the net, MyFHABlog.com.
http://www.myfhamortgageblog.com/2009/06/why-wont-sellers-accept-my-california-fha-offer/
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FHA 203K loans require a little more coordination than a traditional loan would. In order to ensure we have a closing that is as smooth as possible and ON TIME I have created this post to guide Realtors on how you can us assist us AND your clients in getting our FHA 203K loans closed.
1.) Purchase Contract – Needs to indicate FHA 203K financing and needs to provide at least 45 days to close. We need contingencies that are slightly longer than normal so we can get the inspection AND the contractor bids.
2.) Utilities — ALL utilities need to be on at the time of home inspection AND appraisal. Get them on and leave them on until we have an appraisal that indicates functioning systems. Why? Because when a foreclosed / vacant house sits, and the systems are inactive for an extended period of time, they tend to break. For a home to be FHA approvable we need functioning systems. With a 203K we can correct any issues with plumbing, electrical or HVAC, but we need to know if they are broken or not. Therefore, we need utilities ON. If utilities cannot be turned on we can still work with it, but we’ll add between 10-20% in contingency reserve on top of the renovation escrow account.
3.) Inspections – Beside your home inspection, which should be standard on any purchase, FHA 203K loans may require additional inspections if the purchase contract or pre-existing conditions call for them. If the house is vacant for more than 30 days and is on septic then we need a septic inspection. If the purchase contract calls for a termite inspection then we need the termite letter. Be aware that depending on property condition additional inspections may be required. On full 203K loans (loans with more than $35,000 in renovation OR any renovations that are structural) you will be required to pay for a HUD Consultant to inspect the property and review the contractor proposal.
FHA 203K renovation loans are the best loan for this market now, but it is no secret they require some additional effort and some additional time from the participating parties. Realtor’s take heed, your first step is to find a loan officer with renovation loan experience. If you do so you’ll make your life and your clients lives a little less stressful!
Want more info on renovation loans? Give us a call! We don’t just write about FHA 203K financing we ACTUALLY CLOSE THEM!
Serving markets all over the SOUTHEAST!
Atlanta | Savannah | North Georgia | Augusta | Warner Robbins | Birmingham | Huntsville | Montgomery | Central Alabama | Mobile | South Georgia | Florida Panhandle | Orlando | Jacksonville | Tallahassee | Panama City | Miami | Tampa | Ft. Lauderdale | Chattanooga | Nashville | Knoxville | East Tennessee | Central Tennessee | Memphis | South Carolina | Charleston | Greenville | Columbus | North Carolina | Charlotte
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Easy question right? Full FHA 203K is over $35,000 in repair and the Streamline 203K under $35,000 in repair. Post over right? We can all go home now?
Not so fast. I get calls every daily from distraught home-buyers, distraught Realtors and distraught loan officers across the Florida, Georgia, Tennessee and Alabama markets I serve who’ve had a streamline 203K denied. Denied not because of the 203k renovation amount, denied because the scope of the work did not fall under streamline 203k guidelines.
Here are some of the biggest streamline 203k deal killers:
1.) Termite Damage — When I worked as a mortgage broker and didn’t have access to the full 203K this was the single biggest deal destroyer in the renovation loan market. A termite letter is not required by all lenders, but it is required by some. If you live in the South and are looking to buy an older home then there’s a good shot that house has had termites at some point. Termites eat joists, they eat subfloors, they eat things that are structural in nature. Any structural damage is automatically a full 203K, no exceptions. Be aware of this issue.
2.) Framing — Yeah, you might think taking out a wall to make the bathroom bigger is cosmetic, but you are not an underwriter. Moving a load bearing wall is structural and is not an eligible streamline 203k repair. But, but, this wall is not load bearing! Says who? Your contractor? Want to pay $400 for a Structural Engineer’s report to verify? I didn’t think so. Moving walls means you need a full 203K.
3.) Sub-flooring — Yeah, I love those houses built in the 20’s as well. We certainly have plenty of Atlanta neighborhoods full of them. Problem is, those houses have settled. Your indoor putting surface will take on a new level of difficultly in most of those houses. No problem, lets level this out! Nope, not with a streamline 203K. That is also structural, you’ll need a full 203K for that.
4.) Landscaping, Grading, Site Amenities — The drainage is bad and the driveway sucks, I want to fix that! Sorry, not on the streamline 203K. No landscaping and no site amenity improvements are allowed. You’ll need a full 203K for that too.
I guess you are out of luck buying that fixer upper. You’ll probably never get a loan. Your destined to be paying your landlord’s rent or hearing your upstairs neighbors playing Guitar Hero forever. Don’t throw the towel in just yet though. When you are searching for a 203K Renovation lender just make sure they offer the full 203K as well. With access to both products you can eliminate any of the potential streamline 203K deal killers you may face. Luckily we have you covered, we can even help investors renovate via the Fannie Mae Homestyle. So get out there and buy yourself a heap, we’ll fix it up for you!
APPLY NOW for your FHA 203K Renovation Loan!!
Serving: Atlanta | Nashville | Memphis | Savannah | Birmingham | Charleston | Durham | Raleigh | Charlotte | Mobile | Huntsville | Greenville | Miami | Jacksonville | Orlando | Tampa | Tallahasse | Montgomery | AND MORE!!
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Today we will discuss the topic of FHA gift money for homebuyers looking to purchase a home in Atlanta and the rest of Georgia via FHA or FHA 203K renovation financing.
Gift money for an FHA loans can be used to cover the down payment and closing costs.
Acceptable places to receive FHA Gift money from:
- Family Member
- “Documented” Close Friend
- Employer
- Church
- Non-Profit
Non-acceptable places to receive FHA Gift money from:
- FHA Lender
- Seller
- Agents / Loan Officers
- Any other party involved in the purchase transaction
- Business partner
Allowable FHA closing costs range from 3 - 6% of the purchase price, depending on the size of the loan. Since FHA allows the seller to pay closing costs of up to 6%, it is highly likely that a borrower can have enough money to cover costs and buy a lower interest rate with the properly negotiated FHA deal.
Per 2009 Georgia FHA guidelines, the minimum down payment requirement on an FHA loan is 3.5% of the purchase price.
Frequently asked questions about FHA Gift Money:
Q: What is the maximum amount of gift money that a borrower can receive?
A: There is no maximum other than the 6% of the purchase price limit.
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Q: Does the borrower have to pay the gift money back?
A: No, then it is not a gift, it is a loan. Donors must complete paperwork stating no expectation of repayment.
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Q: Just to clarify, can a borrower receive enough gift money to cover all closing costs and down payment, essentially allowing the borrower to move into a new property with no money down?
A: Yes
Read all of our FHA advice to prepare yourself for your FHA purchase transaction!
APPLY NOW for FHA Financing!
APPLY NOW for FHA 203K Renovation Financing!
