Saturday, March 30, 2013

Myth #5 - Dispelling the Myths of FHA 203k Loans

Another popular myth regarding FHA 203k lending is that the loan takes too long to close and that any lender can do a 203k loan. Watch this short video and find out why that's simply not true. This is the last of a five video series dispelling different 203k myths.

Fore more information on the 203k loan please visit or contact Mike Young at or  1.707.812.7668

Wednesday, March 27, 2013

Myth #4 - Dispelling the Myths of FHA 203k loans

Another popular myth regarding FHA 203k lending is that a borrower can on borrrower up to $35,000 for repairs. Watch this short video and find out why that's simply not true. This is the fourth of five videos dispelling different 203k myths.

Fore more information on the 203k loan please visit or contact Mike Young at or  1.707.812.7668

Sunday, March 24, 2013

What Are FHA Home Loans?

FHA home loans are mortgages for a primary residence insured by the Federal Housing Administration. Investors cannot purchase or refinance with FHA home loans. There are different types of FHA home loans included FHA insured loans, FHA loans with a repair escrow and FHA 203k loans.

FHA insurable loans means that a property meets the Federal Housing Administration's minimum property standards. These minimum standards include working heating, plumbing, electrical, roof and mechanical systems. Properties purchased with a FHA insured loan may still need cosmetic improvement, but the mechanical systems must be in working order.

FHA insured with a repair escrow home loans are used to purchase HUD homes listed with a repair escrow of less than $5,000. The repairs a home buyer may borrow money to fix are minimum property standard repair items such as mechanical systems. If the repairs exceed $5,000, a FHA 203k loan must be used to acquire or refinance a home.

FHA 203k loans are rehab loans used for home improvement. There is also a FHA Streamlined 203k for limited improvements of up to an additional $35,000 to improve or update a home. The repair money is added to the purchase amount (minus the down payment) for payment on one mortgage. Properties must have an appraised value to include the cost of improvements. Purchasing a home for $100,000 and borrowing $25,000 for improvements mean the home must appraise for at least $125,000. Repairs are completed after closing and paid from an escrow account with rehabilitation funds to include a minimum 10% contingency fund.

With a FHA Streamline 203k there are specific repairs that are allowed or not allowed, in order to qualify. Properties in need of major renovation or that requires the repair of structural damage are ineligible for a Streamline 203k. Other restrictions apply.

A FHA 203k loan is more versatile rehab loan and eligible improvements include new appliances, painting, additions like adding a second floor, finishing the basement, and new granite countertops just to name a few. You can also set up a mortgage payment reserve of up to six months of mortgage payments so that you don't face the burden of two mortgages during the renovation period.

FHA home loans are used to purchase and refinance homes including HUD homes for sale across the country. First time buyers can purchase and renovate a dream home and find great value in HUD owned properties.

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Thursday, March 21, 2013

Myth #3 - Dispelling the Myths of FHA 203k Loans

Another popular myth regarding FHA 203k lending is that the rate is too high or that this type of loan is too expensive. Watch this short video and find out why that's simply not true.

Fore more information on the 203k loan please visit or contact Mike Young at or  1.707.812.7668

Monday, March 18, 2013

Myth #2 - Dispelling the Myths of FHA 203k Loans

Another popular myth regarding FHA 203k lending is that it's too complicated. Watch this short video and find out why that's simply not true.

Fore more information on the 203k loan please visit or contact Mike Young at or  1.707.812.7668

Friday, March 15, 2013

Myth #1 - Dispelling the Myths of FHA 203k Loans

MYTH #1 - 203k loans are only for properties that need repairs. Simply not true.

Fore more information on the 203k loan please visit or contact Mike Young at or  1.707.812.7668

Tuesday, March 12, 2013

FHA 203k Streamline - Is It Too Good to Be True?

Wouldn't it be great to get a $35,000 Home Depot gift card in the mail? Wouldn't it be incredible if it was the government that was the one who sent it? According to a new program sponsored by the FHA, one can receive benefits that would be akin to receiving such a gift card. With the FHA's new Streamlined (k) Limited Repair Program, designed as a supplement to the existing Section 203(k) rehabilitation program, greater repairs and renovation is now possible, all at the government's dime.

So what's the catch?

It's complicated!

It must be a time-consuming, complex process, you say. Not exactly. First of all, the FHA 203k Streamline was designed to reduce complications, not add to it. For instance, it was designed especially for simple renovation projects, one in which plans, consultants, engineers and/or architects are not required. However, the benefits are plentiful and generous, as the limit is now up to $35,000.00.

I can't qualify! Oh, it's probably only for the wealthy, the group always benefiting from loopholes in the tax code or the latest Congressional acts.

Qualification is simple but applies to all demographic and socio-economic groups. Like the regular Section 203(k) program, the Streamlined (k) can be used for HUD single-family housing REO properties that have been designated by FHA's Management and Marketing contractor (M&M) as "insurable" with repair escrow ($5,000 or less in required repairs) or "uninsurable" (with more than 5,000 but no more than $35,000 in required repairs) are eligible for the Streamlined (k) program. Actually, the real qualification comes in the type of repairs that will be submitted as eligible work items:

• 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

• Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens

• Accessibility improvements for persons with disabilities

• Lead-based paint stabilization or abatement of lead-based paint hazards

• Repair/replace/add exterior decks, patios, porches

• Basement finishing and remodeling, which does not involve structural repairs

• Basement waterproofing

• Window and door replacements and exterior wall re-siding

• Septic system and/or well repair or replacement

It's probably like HAMP or a lot of the mortgage modification programs. It'll be impossible to find a customer service-oriented bank that will patiently walk me through the process, and give me professional advice that will benefit me, not them.

Well, if that's an experience you're trying to avoid or never want to relive again, you've definitely come to the right place at our company.

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Saturday, March 9, 2013

203k FHA Mortgage, Everything You Need To Know

General Idea:

The FHA insurance program of Section 203 (k) allows homebuyers and homeowners to finance both the purchase (or refinance) a home and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of existing housing.

Purpose of 203(k):

The 203k program is one of many programs offered by the FHA, which insures home loans, thus encourages lenders to provide mortgage credit to borrowers that would not otherwise qualify for loans conventional economic terms (such as home buyers first time) and residents of depressed areas (to where it can be difficult to get a mortgage).

The 203k mortgage satisfies a unique and important need for homebuyers in another way as well. When a buyer wants to buy a home that needs repair or modernization, the buyer generally must follow a rigorous and costly process, first obtaining financing to obtain (purchase) the home, and then getting additional financing for the repair work finally find a permanent mortgage when work is completed to pay for temporary loans. Generally, the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amount of months to pay the loan back. However, the 203k program offers a win win solution for both the lending institution and the potential borrower, ensuring a single loan at a fixed (or adjustable) interest rate in the long term to finance both the acquisition and rehabilitation of a property. The 203k insured loans save borrower's time and money, and also protects lenders, allowing them to have the loan insured even before the condition and value of the property may offer adequate security. In 1996 alone, FHA settled insurance commitments for 17,000 homes; the estimated number of homes estimated to be insured under the 203k FHA program for the year of 1997 is 19,000, and 15,000 for 1998. For housing repair activities that do not require the purchase or refinancing of the property, borrowers may also consider HUD program.

Type of Assistance:

The program of Section 203 (k) insures mortgages covering the purchase or refinancing and rehabilitation of housing, with one or more year of construction. A portion of the loan is used to pay the seller, or if a refinance, to pay the mortgage. The remaining funds are placed in an account in custody and released when the rehabilitation work has been completed. The cost of repair must exceed $ 5,000, but the total value of the property must still remain within the FHA mortgage limit for that zone. The property value is determined by (1) the value of the property before rehabilitation plus the cost of rehabilitation, (or 2) 110 percent of the appraised value of the property after rehabilitation, whichever is less. The property value is determined by (1) the appraised value prior to repairs plus the cost of rehabilitation, (or 2) 110 percent of the appraised value of the property after rehabilitation, whichever is less.

Many of the regulations and restrictions that make a commodity FHA mortgage insurance for single family dwelling (Section 203b, and relatively suitable for low-income borrowers apply here. But, some lenders may charge additional fees, such as supplemental origination fee, fees to cover the preparation of architectural documents and review of the repair plan, as well as higher appraisal fees. However, unlike other FHA insured mortgages for houses, borrowers under the 203k program do not pay a mortgage advance premium.

Eligible Borrowers:

FHA approved lenders, which include many banks, savings and loan associations and mortgage companies can make loans covered by insurance 203k and 203b.

Eligible Customers:

Everyone who can fit approval status for a regular FHA insured mortgage are eligible to apply. Cooperative units are not eligible, individual condominium units may be insured if located in projects approved by the FHA or the Department of Veterans Affairs, or meet certain criteria of Fannie Mae.

Eligible Actions:

The limit of rehabilitation covered by insurance, Section 203 (k) can range from relatively minor or surface reconstruction (as long as cost are over $ 5000) to virtually a total reconstruction: a home that has been demolished or will be flattened as part of rehabilitation is eligible, for example, provided that existing systems of the foundations remain in place. Insured loans under the program 203k can finance the rehabilitation of the residential part of a property, which also has non-residential use; also cover the refurbishment of a property of any size to a structure of one to four units.

The types of improvements that borrowers may make when using the program funding under Section 203 (k) include:

• Reconstruction and structural improvements.

• Changes for improved functions and modernization.

• Elimination of hazards to health and safety.

• Changes to improve appearance and elimination of obsolescence.

• Reconditioning or replacing plumbing, installation of well and / or septic system.

• Additions or replacement of roofs, gutters, and drains.

• Additions or replacement of floors and / or treatment of floors.

• Major landscape work and site improvements.

• Access improvements for people with disabilities.

• Improvements to energy conservation.

HUD requires that all properties financed under this program meet certain basic standards and structural efficiency. However, are not eligible for a 203k loan, luxurious amenities, and improvements that do not form a permanent part of a property.

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Wednesday, March 6, 2013

203k Lender Training

Lender Training now available. Be the best you can be. We'll show you how to provide the best possible service, help you with your Quality Control program, getting you set up right in the beginning can make all the difference in your success or failure with the FHA 203k.

Did you know the lender is REQUIRED to choose the consultant yet we see borrower's changing that assigned consultant now and again. We'll even show you want works and what works better with your marketing efforts.

Why spend a lot of money on things that we already know "doesn't work" marketing the FHA 203k loan program is so simple that most won't do it, thinking it is so easy it won't work... we prove it works, every time, If you want more loans this simple and inexpensive technique works wonders.

Call for an estimate tailored to your needs 

1.707.812.7668 ask for Mike

Sunday, March 3, 2013

FHA Streamline Refinance - An Easier Way For Homeowners to Refinance

The FHA Streamline refinance provides individuals with an easy way to refinance their home. Certain stipulations must be adhered to, but for those who qualify for this process, it is the best route to take. The streamline process allows for a mortgage to be refinanced quickly and with less expense than a traditional mortgage refinancing. The FHA has permitted the use of a streamline refinance on insured mortgages since the 1980's and yet today many people do not realize what this can offer to them.
What Is It?
In an FHA Streamline Refinance, the documentation and underwriting that is needed to refinance the loan is reduced significantly.
This allows the process to be faster and it allows people to move from one loan into another without the hassles usually attributed to the process. It is important to note that there are some costs involved in the process, but they are generally much lower than the costs traditionally attributed to the process of refinancing.
Basic Requirements:
In order to qualify for the FHA Streamline Refinance, individuals must meet specific criteria.
1. The mortgage you currently have must already be an FHA insured mortgages. If you are unsure of this, contact your lender directly and ask if your mortgage is an FHA loan. This simply means that the FHA is insuring the loan by the lender to reduce the amount of risk.
2. In order to use an FHA Streamline Refinance, the mortgage you currently have must be current. If your mortgage is currently delinquent, the lenders may offer solutions to help you to get caught up on the loan payments prior to agreeing to a refinance of this type.
3. No cash may be taken out of the mortgage that is refinanced. If you wish to pull equity out of your home loan, you will need to use another type of refinance loan to accomplish this.
4. The goal of this refinance should be to reduce your monthly principal and interest payments.
As you can see, the requirements for obtaining an FHA Streamline Refinance are quite low. Most lenders are happy to allow you to refinance, especially if it would make paying your loan easier for you.
Why Refinance?
There are several reasons to consider the benefit of using this refinance process. You may qualify for a loan with a lower interest rate or better terms. This may allow to have a much lower monthly payment. With interest rates as low as they currently are, it is a good time to consider refinancing if your interest rate is currently higher than what is being offered.
Individuals who are interested in an FHA Streamline Refinance can take full advantage of this service. The process of obtaining this type of loan is not difficult but it can save you thousands of dollars over the lifetime of your loan, even if you simply reduce your interest rate by a percent or less.

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