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!

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!!

Turning a house into a dream home - that is the power of FHA 203K loans. From an extra bedroom to a bathroom update, a living room to a luxurious master bath, from a modest expansion to full on ground up remodel, FHA 203K loans offer homeowners an affordable way to fulfill their unique vision.

Today we explore some of the most frequently asked questions when it comes to FHA 203K loans…

Q: What is the down payment on a FHA 203K loan?

A: 3.5%, but you can put down as much as you like. The down payment can come from cash on hand, gift from a family member, relocation money from your employer, community grants or from your 401K.

Q: I want to do my FHA 203K renovations myself. Can I?

A: Sometimes. On very simple renovations with a low dollar amount you may be allowed to do the work yourself. However, on any substantial 203K renovation we will require a General Contractor. You can read more HERE

Q: Can I use FHA 203K to renovate a condo?

A: Yes, but restrictions apply as to the number of units in each building. FHA also has other guidelines on condo complexes. If the condo is eligible you will only be able to do interior work. For the most part, your condo will be difficult to get approved on a FHA 203K loan

Q: Can I be compensated for materials I purchased outside the work listed on the initial FHA 203K contractor bid?

A: No. Your 203K renovation escrow amount is established before the loan closes. In some rare cases you can request a change order after your closing to fix an issue that came up during the 203K renovation process. Be aware, however, that you must do this PRIOR to completing the work. Generally, any work performed outside the scope of repair as listed on the bid when your loan closed will be your responsibility to pay for.

Q: Do I need a home inspection? Do I need a special Inspector?

A: Yes! You should get a home inspection on the purchase of ANY home. The inspection will help ensure our 203K loan doesn’t encounter any unexpected problems during the renovation process. On most 203K loans you can use any certified home inspector to do your inspection.

Q: Can I get money before the 203k renovation begins?

A: There are no 203k upfront funds disbursed at most lenders with the exception money to order flooring, cabinetry and windows and other like materials that can sometimes take time to deliver and require an upfront deposit. For this reason we recommend your FHA 203K contractor have a line of credit so they can begin work immediately. You can read more about the contractor selection process HERE.

STAY TUNED for Part Two of my FHA 203K renovation financing FAQ.

APPLY NOW for FHA 203K Financing!

Here are the 10 things you need to know about these changes to your Georgia FHA Refinances:

1. The max LTV for rate & term refinances (including streamlines WITH an appraisal) is 97.75%*

2. The max LTV for cash-out refinances is 95%* for loan amounts less than the conforming limit and 85%* for loan amounts at or above the conforming limit. (Must have 12 months seasoning and no 30 day late payments)

3. Two appraisals will be required for all cash-out refinances with an LTV above 85%.

4. The mortgage must be current for the month due.

5. New or current 2nd mortgages are eligible with no maximum CLTV.

6. Loan amount for streamline refinances WITHOUT an appraisal cannot exceed the original loan amount.

7. UFMIP rates: 1.75% for all rate & term and cash-out refinances AND 1.5% for all streamline refinances.

8. The FHA Secure refinance will be terminated.

9. Loan amount CAN include: Closing costs, discount points, current interest, prepayment penalties, prepaids, late charges, and escrow shortages.

10. Cash back on rate & term and streamline refinances CANNOT exceed $500.

Jonathan Blackwell FHA 203K Renovation Specialist Hometown Lenders Atlanta, Georgia, 30317	Work: 404-551-3845 Mobile: 404-519-5383 www.203KLoan.net

This is the first in a series of posts outlining the basics of FHA loans. What you qualify for, how much the down payment is, underwriting and documentation along with tips and tricks for a smooth closing will all be covered. Feel free to contact me directly with any specific questions.

How Much Can I Borrow?

How much do I qualify for is ALWAYS one of the first questions I’m asked. There are two things to consider when you are looking to purchase via FHA in Georgia. First, you’ll be limited by FHA loan limits. These are county specific. For example an Atlanta FHA loan is limited to 2009 Metro Atlanta loan limits of $320,850 for single family residences. The rest of Georgia, including Savannah, are limited to $271,050.

The second thing to consider is debt to income ratio. FHA guidelines like for you to use no more than 31% of your income for housing. It is possible to exceed this amount with compensating factors such as a high credit score or plenty of assets. As far as your total debt to income ratio, FHA would like you to spend no more than 43% of your total income on debt. Of course, the same compensating factors listed above apply to this ratio as well so you can exceed that guideline in some instances.

What is the Down Payment Required?

The down payment requirements are changing to 3.5% in 2009 for traditional FHA purchases. However, FHA 203K Loans, along with FHA 203H loans for disaster victims and FHA Energy Efficient Mortgages, are not affected by the change and will remain at 3% down. One note is that on the FHA 203K and other FHA specialty products requiring the lower down payment, you can still include the appraisal and a portion of your closing cost in the down payment.

What Paperwork Will I Need?

When applying for your Georgia FHA loan you’ll need to fully document your income and assets along with providing full explanations of any credit problems in the past 2 years.

1. Two Years W2 & Two Most Recent Paystubs.
2. Tax Returns generally only needed for self-employed borrowers, borrowers with rental income and borrowers using commission income to qualify.
3. Two months full bank statements. Must be “official” statements and must include ALL pages.
4. Most recent statements for retirement and investment accounts.
5. Color copy of Driver’s License and Social Security Card.
6. Credit explanation letters, bankruptcy papers, divorce decrees, child support documentation, leases on rental properties, etc are required if applicable.

What Credit Score do I Need?

FHA and lender guidelines generally require a 580 mid score or above to qualify. However, 620 or above should get you the best FHA rate available. The higher the better though and home buyers with excellent scores will generally be required less documentation and have faster underwriting turn times.

How Long Does the Process Take?

That depends on a number of factors, but 30 days or less should be the goal on a purchase. Borrowers with lower credit scores will generally be required to document more and therefore can sometimes take a little longer than borrowers with excellent credit. If you are doing a FHA 203K Renovation Loan then 30 days is still reasonable on the 203K streamline version, but plan for 45-60 on the full 203K due to the additional third party items needed. FHA Streamline refinances should be the quickest to close because of the reduced documentation requirements.

How Do I Get Started?

The first step is ALWAYS to call an experienced FHA loan officer to help you determine what you are qualified for so you can get a pre-approval. You should also be prepared with you income and asset documentation. The speed in which we can close you loan often depends on you more than anyone else.

Apply for Your Georgia FHA Loan

Jonathan Blackwell FHA 203K Renovation Specialist Hometown Lenders Atlanta, Georgia, 30317	Work: 404-551-3845 Mobile: 404-519-5383 www.203KLoan.net

The Fed, in a much anticipated move, slashed the target rate .75% to 0.25% in an all out effort to stimulate the US economy. That wasn’t the only big news coming from the Fed though, they also announced they’d be buying mortgage backed securities in a BIG way! What does that mean to you? It means that your Georgia FHA mortgage rates in Atlanta are going to be going DOWN! When the price of MBS increase, interest rates decrease.

Your FHA 203K Renovation Loan rates have come down as well! Call us today to see what you qualify for!

Jonathan Blackwell

404-551-3845

EMAIL

2008 is almost gone and 2009 is just around the corner. Home buyers in Atlanta need to be aware that we are facing some changes if we are looking to purchase a home using in FHA financing in 2009. The first big change is the FHA loan limits for Georgia will be decreasing some in 2009.

FHA Loan Limits 2008

Single-Family = $346,250

Two-Family = $443,250

Three-Family = $535,800

Four-Family = $665,850

FHA Loan Limits in 2009

Single-Family = $320,850

Two-Family = $410,750

Three-Family = $496,500

Four-Family = $617,000

The limits in the rest of Georgia outside the metro area will remain the same in 2009 as they were in 2008.

Georgia Non-Metro FHA Loan Limits 2008 & 2009

Single-Family = $271,050

Two-Family = $347,000

Three-Family = $419,425

Four-Family = $521,250

Finally, in addition to Atlanta’s FHA loan limits decreasing, the down payment will be increasing as well. Previously, FHA required 3% as the down payment. In 2009 FHA will require Atlanta home buyers to put 3.5% down on their next FHA purchase. There is still one exception to that rule for HUD foreclosures. They will still only require $100 down for home buyers purchasing a primary residence. You still have time to take advantage of the higher FHA loan limits and lower FHA down payments though, but you have to act FAST!. Give us a call TODAY to get started on your FHA purchase! If you are purchasing with a FHA 203K Renovation Loan then your down payments will remain the same!

Jonathan Blackwell

Hometown Lenders

404-551-3845

EMAIL