Tuesday, February 28, 2012
We all are living in a world which is turning green. Have you noticed that? It seems like every man, every woman and child, every organization and product, really want to become "green" and Eco-friendly.
Lots of time and energy placed powering the green changes is often a wonderful idea. We hope our children and grandchildren are going to appreciate it.
However, a ton of what's happening is often just a "greenwashing", where any excuse to label something" green" brings you to the circumstances which are sitting on very thin ice. Really, besides its green color, how "green" may your car be? And what about Eco-friendly cleaners or genetically engineered food? These products are stretching out the definition of "GREEN" beyond any reasonable meanings.
The good thing is that during the construction and restoration of America's housing, we are able to combine designs, practices and materials, which help protecting our environment.
And, to assist this effort and hard work, those, who are in the business of building and remodeling homes as well as those, who are buying and owning homes are becoming more and more knowledgeable and more dedicated to this motive.
The good thing is that the most significant tips for effectively "greening" America's existing inventory of housing can be obtained from 203k loan and Energy Efficient Mortgage. The 203k Mortgage is truly a "Green Mortgage" because it comes with a simple, cost-effective solution and provides funds for "green" housing innovations.
Typically the 203k Mortgage permits home owners to amortize the cost of improvements offering long-term cost benefits within the lifetime of the home loan, benefiting them with lower interest rate, than a short-term financing would ever offer. Implementing an Energy Efficient Mortgage, "green" improvements can easily be included to a 203k mortgage loan, enabling home owners to surpass the Federal housing administration loan limit total by the approved energy efficient costs. For many people this offers a chance to not just offset the cost of these improvements along with utility cost savings, but also lowers the overall cost of homeownership. Plus, along the process, we are supporting reduce America's energy dependence.
While an increased exposure of preserving our environment and saving of our natural resources continues, it would make sense for all of us to accomplish our best to help more american people not only make their home-dream come true, but with the effectiveness of the 203k, even turn these dreams genuinely "Green."
Article Source: http://EzineArticles.com/4558688
Saturday, February 25, 2012
The FHA 203(k) Home Renovation Loan is perfect for HUD foreclosures, handy-man specials, or any home in need of repair. This is because it offers borrowers the ability to finance the cost of the rehabilitation of a property. And this loan can be used for either the borrower's current residence or a fixer-upper into which a borrower wishes to move. The eligible improvements allowed on FHA 203(k) loans are numerous, and many clients are pleasantly surprised at just how useful of a tool this loan can be. For instance, in addition to typical home improvement loan projects, the FHA 203(k) mortgage loan program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling.
The 203(k) Program is not offered directly by the FHA, meaning that one cannot apply directly to the government for the loan. Instead, it is offered to the public through FHA-approved lending institutions. It is to one of these institutions that a client applies. And it is one of these lending institutions that ultimately approves and funds the loan. The FHA sets the guidelines and insures the loans to facilitate liberal lending and help with the sale of these loans on the secondary market.
Originally utilized primarily for purchases, the FHA 203(k) loan program was created to help revitalize properties into which families could move and live. As time has passed, these loans have also been made available to existing homeowners seeking to refinance one to four family residences. These residences must be existing structures, at least 1 year old, and be used for residential purposes. This means that they must be owner-occupied. To lenders of traditional loans, these properties in need of repair are considered poor collateral on which they would prefer not to lend. To the FHA, which is committed to expanding home ownership through insurance and more liberal underwriting guidelines, such properties are not only acceptable but also desirable.
The standard FHA 203(k) loan includes purchases or refinances that involve more than $35,000 in repairs. It is available to augment an FHA Energy Efficient Mortgage (EEM), insure the mortgage on a single-family housing unit sold from the REO inventory of HUD, or to insure a mortgage that covers both repairs costs and the refinance of an existing mortgage. Once this $35,000 threshold is reached, it is necessary to involve both an appraiser and a consultant. The consultant prepares the work write-up and cost estimate. An architect, engineering or home inspection service then needs to inspect the property to ensure that:
- There are no rodents, dry-rot, termites and other infestation;
- There are no defects that will affect the health and safety of the occupants;
- The existing structural, heating, plumbing, electrical and roofing systems are adequate; and
- The completion of thermal protection upgrades (where necessary).
As such, on a standard FHA 203(k) loan, the process is often as follows:
- Contact lender for pre-approval
- Locate property & make offer
- Offer accepted
- Home inspection
- FHA 203K consultancy
- Architectural drawings
- Contractor bids & contractor selection
- Appraisal Loan submission & underwriting
- Underwriting conditions cleared
- Loan closing
- Repair begins Final inspection / Title Closeout
The easiest and quickest version of the program is the FHA 203K Streamline. This allows a home buyer or homeowner to finance up to $35,000 of home repairs in the purchase or refinance of a home. It does not involve HUD 203K Consultants or architects. This is because the Streamline is intended to facilitate uncomplicated rehabilitation or improvements to a home for which plans, consultants, engineers and/or architects are not required. The Streamlined (k) program includes discretionary improvements and/or the following:
- Repair/Replacement of roofs, gutters and downspouts
- Repair/Replacement/upgrade of existing HVAC systems
- Repair/Replacement/upgrade of plumbing and electrical systems
- Repair/Replacement of flooring
- Minor remodeling, such as kitchens, which does not involve structural repairs
- Painting, both exterior and interior
- Weatherization, including storm windows and doors, insulation, weather stripping, etc.
So, whether it is to finance an impossible to pass-up foreclosure deal, the addition of a new deck, the replacement of a bathroom, saving the purchase of a home that the bank turned down due to property condition or making a change that turns an ordinary home into your dream home, the FHA 203(k) Loan can help.
Wednesday, February 22, 2012
Not all lenders are approved by FHA to offer FHA 203k loan financing because FHA programs are more complex than traditional conventional mortgages. Homebuyers that want to buy their first home, or lower to moderate income home buyers that want to be owner occupants, and in need of up to $35,000 for repairs or upgrades should meet with a lender approved by the FHA and experienced working with FHA 203K loan program. The FHA lender will help borrowers learn what they qualify for and what repairs or improvements are eligible under the program.
It also helps to find a real estate agent that understands the 203k program when viewing properties to purchase. A knowledgeable real estate agent experienced in negotiating foreclosures and helping homebuyers select properties that are eligible for the repairs and upgrades will help make the FHA 203k home buying process run smoother.
To have a successful closing homebuyers must remember that they should not buy large items, or run their credit cards up, during the home buying process. Homebuyers should not purchase furniture, televisions, and cars until after closing on the home. They should not change jobs or quit a job. Try to keep your financial picture the same as when you applied for your loan.
FHA 203k is a great option for buying bank owned properties. Homebuyers can get one loan that includes funds they need to buy a home and fix it up. The rehab funds are placed in an escrow account and released as the work is completed. The down payment is minimal of the total cost and homebuyers don't need perfect credit.
Article Source: http://EzineArticles.com/4235975
Sunday, February 19, 2012
This quick info video will inform you on everything you need to know about the FHA 203k streamline Rehabilitation Mortgage Loan Program that will allow a buyer to finance repairs and home improvements on top of the purchase price.
For more information on how to get pre-approved for the 203k Rehabilitation Loan, or to find out how to become a 203k contractor or consultant, give Mike Young, the 203k expert, a call!
Thursday, February 16, 2012
Today's world is changing at a dramatic pace. Skyrocketing energy prices and a planet showing years of abuse have led many to consider the way they live and how to change their lifestyle. The easiest and best way to reduce our energy consumption and to help preserve the planet for our children and grandchildren is to start at home. The place where we spend the most time, where we consume the most energy and our biggest asset all in one. Our homes are responsible for huge outlays of money and responsible for preserving and creating wealth for our families. Now is the time to do you part, help the planet, take advantage of the incredible tax and utility company credits, increase the value of your home and prepare yourself for energy price increases by financing your energy saving improvements with FHA 203K> renovation financing.
FHA 203K renovation loans have been around for decades, but they have recently found a new use in helping people go green. How do they work? The process is simple really, one loan closing with money to purchase the property or to payoff current debt and an escrow account for repairs. Loans over $35,000 are facilitated with the aid of a HUD approved consultant designed to help administer contractor draws and insure repairs are done to FHA specifications. Loans under $35,000 don't require a consultant and repairs can be done by the borrowers chosen contractor or, in some cases, the borrower themselves. 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.) Environmentally Friendly Landscaping and Lawn -- Making an eco-friendly outdoor area that saves water and provides shade, helping you reduce heating and cooling costs, is not as hard as you think. How do we you do it? First of all choose local plants that require less water and less pruning. Pruning creates waste and fills landfills, avoid it if possible. Choosing local plants can help you conserve water and require less work. If you have an irrigation system install a "smart" system that calibrates water needed based on local climates and plant needs.
5.) 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.
6.) Better Insulation -- An obvious choice for a green home, insulating your home better can help you save thousands on energy bills.
7.) 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.
These are just a few of the myriad of green renovation choices you can finance with an FHA 203K renovation loan. There are literally hundreds of other ways to green your home, save yourself hundreds in monthly energy costs, increase your resale value and do your part in preserving the planet. The time is now to take action and do what you can. You never know, you might just be able to dramatically cut your monthly energy bills, create a bundle in home equity and substantially improve the marketability of your home.
Monday, February 13, 2012
Summary - The FHA's Section 203(k) insurance was designed to enable homebuyers and homeowners. They can finance the purchase of a house and the cost of its rehabilitation through a single mortgage. They can also finance the repair, rehab or special needs update of their existing home. This program can be used to refinancing a borrower's existing home and also include the cost of any repairs or updates that are needed. All these options include any special needs updates such as ramps, safety equipment or home modifications that are needed.
Purpose - FHA Section 203(k) fills a specific need for an assistance program for some homebuyers. When a purchaser wants to buy a house that needs repairs, modernization or special needs upgrades homebuyers usually have to follow an intricate, expensive and a drawn out process. The interim purchase and rehab loans often have relatively high interest rates, short terms and a balloon payment at the end.
Section 203(k) offers a solution that is an advantages to both the purchaser and the lender. This program insures a single, long term, fixed or adjustable rate loan that covers both the purchase (refinance) and/or repairs of a home.
FHA Section 203(k) insured loans help purchasers save time and money. They also protect the lender by having the loan insured before the repairs are made to the home. This gives the lender complete protection for the total balance of the loan before the property offers adequate equity to secure the full loan amount.
If the borrower has a less expensive repair/rehab/up-grade project the Streamlined 203(K) program may fit the bill. The FHA's Streamlined 203(k) program lets homebuyers finance up to an additional $35,000 onto their mortgage to improve or upgrade their home before move-in. With the Streamlined 203(K) program homebuyers can quickly and easily access cash to pay for property repairs, improvements or upgrade to include special needs additions.
Assistance - The FHA Section 203(k) program insures a mortgage issued to purchase or refinance and/or rehabilitate a home. This home must be at least one year old at the time the application for the mortgage is made. Part of the loan is used to pay the seller for the home or, in the case of a refinance, to pay off the existing mortgage. The remaining funds are placed in an escrow account and released as the repairs or rehabilitation is completed.
The total cost of the rehabilitation/repair project must be at least $5,000.00 and the total value of the property must still fall within the FHA mortgage limit for the area. The value of the property is determined by either the value of the property before rehabilitation plus the cost of rehabilitation or 110 percent of the appraised value of the property after rehabilitation, whichever is less.
Many of the rules and restrictions that make FHA's basic single family mortgage insurance helpful for lower income borrowers apply here however lenders may charge some additional fees that are not applicable to the basic FHA insured mortgage. These fees include but are not limited to supplemental origination fee, fees to cover the preparation of architectural documents and review of the rehabilitation plan, a higher appraisal fee and other fees deemed appropriate by the FHA.
Eligibility - Any person who can make the monthly mortgage payments are eligible to apply. Cooperative units are not eligible but individual condominium units will qualify if they are in a condominium complex that has been approved by HUD/FHA or the VA.
Activities Allowed - The extent of the rehabilitation or repairs that are covered by FHA Section 203(k) insurance range from relatively minor, though total rehab. The costs of repairs must be more than $5,000.00. A home that has been or will be demolished as part of a rehabilitation/repair project is eligible, as long as the existing foundation system remains in place and intact. Adding on to the existing foundation as permitted.
FHA Section 203(k) insured loans can finance the rehabilitation or repair of the residential portion of any property that also has non-residential uses. This loan program can also cover the conversion of a property of any size to a one to four unit structure.
Improvements, repairs or upgrades that a borrower may make using FHA Section 203(k) financing include:
• structural alterations and reconstruction
• modernization and improvements to the home's function
• elimination of health and safety hazards
• changes that improve appearance and eliminate obsolescence
• reconditioning or replacing plumbing; installing a well and/or septic system
• adding or replacing roofing, gutters, and downspouts
• adding or replacing floors and/or floor treatments
• major landscape work and site improvements
• enhancing accessibility for a disabled person
• making energy conservation improvements
It should be noted that HUD requires that properties financed under this program meet certain basic energy efficiency and structural standards. Check with HUD or visit the HUD website for complete details - WWW.HUD.Gov
Application - Applications must be submitted through a FHA approved lender and not directly to the FHA.
The FHA credit rules have just recently gotten stricter. What was acceptable a year or two ago is no longer in effect. However, FHA loans still offer more leeway in their terms and conditions than most conventional loans.
Interest rates on FHA loans are competitive but, due to the volatility of today's mortgage market, rates can and do change quite often. Check with your lender, broker or agent to get the latest rates.
FHA rules are subject to change. These were the guidelines at the time this article was written - January 20, 2012. Please check with the applicable agent or agency to ensure that they are still current before making any buying decisions.
Article Source: http://EzineArticles.com/6831429
Friday, February 10, 2012
Across there are a large number of short sale homes available to buyers. A short sale is a home being sold for an amount less than the existing mortgage balance. These homes often have a few cosmetic repairs that need to be made in order to make the home more presentable, if not safe. For years the issue of repairing a home prior to purchase was a catch 22. The bank or seller was not willing to spend extra money on a home that they are selling. The buyer could not make the repairs because they did not legally own the home. The FHA 203k loan solves that problem with ease.
Two Kinds of Loans
The Federal Housing Authority (FHA) offers a loan called the 203k mortgage, named after the code section where the loan is found in the FHA guidelines. This loan is offered as a Streamline version and the regular version. The streamline was designed to offer lower amounts designated for repairs and slightly less paperwork. Both loans are ideal for homebuyers who wish to purchase a home in need of some repairs.
How the Loan Works
The loan program allows buyers to purchase a home based on the sales price. In addition, the buyers can borrow extra money to make the necessary repairs. Once the loan is approved and closed, the extra money is placed in an escrow account. The contractor that is doing the work will receive payment once the work is completed. This protects the borrower and the lender against problems with the repair process.
The amount needed for repairs is added to the loan for the purchase and the homebuyer makes one payment, at one interest rate, on the entire loan. Since mortgage rates are so cheap right now it is a wonderful way to buy a home that may be priced below market value due to some simple fix-ups.
The Streamline 203k loan will allow homebuyers to borrow a minimum of $5,000 and a maximum of $35,000 to be used towards the repairs. The regular 203k loan allows much more as a percentage of the sales price and the estimated appraised value after the proposed repairs have been made. The regular 203k loan will need the involvement of an appraiser, home contractor and loan officer from the very beginning to make sure the loan and repairs meet the guidelines of the program
What Can be Done with 203k?
Homebuyers often ask about the types of repairs that can be done with the Streamline 203k program. The following list shows some of the more popular tasks accomplished using this type of loan
- New gutters and a new roof
- New Heating and air conditioning system or repairs to the existing system
- Plumbing updates and repairs
- Electrical updates and repairs
- Bath and kitchen remodels, to a lesser extent
- New flooring of any type; wood, carpet, tile
- Painting for both exterior and the interior
- New windows and doors
- Energy efficient appliances
The 203K loan allows many types of repairs and improvements that can greatly enhance the value of a home and give buyers a chance to purchase a place at a savings. This loan is ideal for short sales or foreclosures.
Article Source: http://EzineArticles.com/6849098
Tuesday, February 7, 2012
With the market flooded with foreclosure homes, many see distressed properties as the golden ticket of real estate. There are certainly good deals to be found but buying a bank-owned home can be a complicated and time-consuming prospect. Here are some tips to help you on your way.
1. Matching the Criteria - Keep in mind that banks will be wary of selling their foreclosed property to someone with weak credit. No bank wants to be put in the same position in another year so they will look for buyers who have outstanding credit, a hefty amount of cash for a down payment, or both.
2. Patience - It can take a great deal of time to find the right property in the foreclosure market, and once you've found the right home, it can take even longer to deal with the bank and the paperwork. If you're in a hurry, buying a distressed property probably isn't for you.
3. Be Specific - The housing market is full of options for a buyer right now, and the foreclosure market in particular is overflowing. To save on wasted time and energy, try to narrow your search before you start looking for a home. Sticking closely to a single neighborhood or small area of town can help things considerably. Additionally, you should try to look in a neighborhood that has relatively few foreclosures. These areas will be more likely to rebound quickly once the market improves.
4. Do Your Homework - Knowing as much as you can about the market and the properties that you are interested in will always help the process. Look at property values and employment trends to determine which neighborhoods may see their home values rebound quickly. A good Realtor would be a big help with this kind of research.
5. Learn About the Seller - Along with researching local areas, you should also research the bank that you are planning to buy the property from. Try to talk to the bank directly and find out what they're looking to get out of selling the property. If they tell you that the monthly costs of upkeep are too high, they might respond better to an offer to buy quickly. If their biggest concern is the minimize losses, you might benefit from putting in an offer close to market price. Find out what the bank needs and you'll have an advantage.
6. Get a Good Realtor - Even if you do all of the research and legwork yourself, sometimes a bank will not be willing to work with a buyer directly. In this case, you'll have to find yourself a good real estate agent. Luckily, a good Realtor can also help with your research, dealing with the lender and handling all the complicated paperwork. Research local agents like you would anything else. It's important to find someone who has a great deal of knowledge and experience in the local area. You also want to find someone who is patient, personable and diplomatic. Buying a distressed property can be very time-consuming and you don't want an agent who will give up halfway through.
There are plenty of great deals to be had if you want to buy a distressed property. Just follow this advice and the process will be much smoother.
Article Source: http://EzineArticles.com/6476001
Saturday, February 4, 2012
Almost everyone knows about FHA mortgages. They are tailor-made for first time homebuyers and others with less than perfect credit or other financial issues. You don't have to be low income or have bad credit to use FHA, but generally the loan limits prohibit high priced homes.
What you may not know about FHA is that there is a special loan program designed to provide the funds to buy or refinance your home PLUS additional funds to make repairs or improvements.
This FHA mortgage is called the 203K and the K is the operative part of the name. Not every lender participates in the rehab loan program, but the major national lenders do. If the loan officer you contact is unaware, then call the corporate office and ask them to direct you.
The FHA 203K loan program calls for an FHA inspector to go over the house, using the plans you gave him. Before you get to this inspection phase, you should be working with a general contractor who understands how to provide plans and specs for a project. Plans and specifications are standard in the contracting industry for anyone managing a project >$5000, which is the minimum rehab amount for this loan program.
The FHA inspector will decide if the project is feasible, depending on whether there is additional work required to bring the property up to code, and whether or not the property will appraise for enough to make the project "worth it". FHA is willing to lend based on the after-rehab value and will even stretch that value a little in order to get houses brought up to code.
Once the lender is happy with the valuations, the plans and specs, and the inspector's report, your loan file will be reviewed by an underwriter specially trained and certified in rehab loans. Your credit and finances do not have to be perfect to be approved, but the creditworthiness and qualifications are similar to a regular FHA loan.
One of the benefits of a 203K is that all costs can be added into the project. The fees, permits, closing costs, etc. are all added up and your downpayment on the purchase is calculated on the total. If you are refinancing instead of purchasing, the amounts are totaled the same way, but you might already have enough equity in the home to avoid coming up with any cash.
What's next? Once approved, the loan closes and the rehab portion of the money is escrowed by the lender. The contractor submits requests for payment and each phase is inspected. As soon as the work passes the inspection for completion, the contractor is paid. You can not go back to the well for more money, so your initial plan must be a good one. A contingency fund is usually added in during the total project calculation.
This contingency fund can only be used to fund hidden repairs that were not evident during the initial workup. Any remaining funds in the contingency are used to pay down the mortgage at the end of the project.
The FHA 203K mortgage is not a "piece of cake", but if you do not qualify for low cost money at the local home improvement equity loan bank, then it is very definitely worth looking into.
Article Source: http://EzineArticles.com/58572