Tuesday, April 28, 2015

Buying a Home with the FHA 203k in Fort Pierce FL


Buying a home with the FHA 203k in Fort Pierce FL or anywhere else for that matter can be smooth or a nightmare. It is mostly attitude. The attitude of the borrower.

Nightmares typically happen when they try to do it themselves. I'm referring to the buyer again. The buyer wants to cut the cost to lower the loan amount, then lower it some more, cutting out all of their dream to achieve this secondary goal. They totally have disconnected from their original goal of buying their dream home.

It is important to keep your eye on the target. If your dream home is sitting there in front of you why then would you want to cut this and that out of the scope of work to keep the payment $30 or $50 per month lower?

Buying that dream home on the other hand is as easy as using a team of professionals. People who have taken the time to learn how to do it correctly and are intent on giving you that "ah ha" feeling that comes with a smooth transaction.

I see so many people who fail to add the work that they want to do to save a small amount on their monthly payment only to become a slave to the house. Every weekend they plan to work on it a little at a time to get those items that would have made this home more like what they wanted. Don't become a slave to your own house. Life is too short and you never know how much time you have left. Enjoy your home and get on with your life.

We have put together such a Team in Fort Pierce and of course they can work the surrounding area for about an hour to two hours around the Fort Pierce area. We have other teams throughout FL that can assist you as well.

Saturday, April 25, 2015

FHA 203K Loans Bring New Life to Old Homes

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), offers many home loan programs to help foster American home ownership. Perhaps one of the most unique programs is the FHA 203K loan. This program is designed to help communities revitalize their neighborhoods by providing loans to rehabilitate, repair or modernize homes.

According to HUD, an FHA 203K loan can be used to rehabilitate or improve a one-to-four unit dwelling in one of the following three ways:

  • 1) To purchase a piece of property and the land on which it is located and rehabilitate it.
  • 2) To purchase a piece of property on another site and move it onto a new foundation on a mortgaged property and rehabilitate it.
  • 3) To refinance existing liens on the property and rehabilitate it.

The maximum amount that one can borrow on an FHA 203K loan cannot exceed 110% of the home's value after the rehabilitation is complete. The minimum amount one can borrow is $5,000. Many homeowners find these loans so helpful because they can be used it for such a variety of improvements. A borrower can use it to completely rehabilitate an old home or remodel a bathroom, repair a chimney, improve flooring, build a skylight or even complete major landscape work!

When applying for an FHA 203k loan, one or two appraisals will be required. Some lenders will require an "As-Is" appraisal to be done before rehabilitation takes place. This initial appraisal will determine the current value of the home. However, some lenders may deem the "As-Is" appraisal not necessary and will use the contract sales price on a purchase transaction instead depending on when the property was purchased.

After the "As-Is" value is determined, the borrower must submit their planned repairs to the FHA. After these repairs are submitted, another appraisal called an "After Improved Value" appraisal will be done to determine the fair market value of the property once improvements are completed.

To obtain a correct "After Improved Value" appraisal, it's important to include all of the eligible expenses in the cost of the rehabilitation. Eligible expenses that can be included are: cost of materials, labor, contingency reserve, overhead and construction profit, up to 6 months of mortgage payments, permits, fees, inspection fees by a qualified home inspector, licenses and consultant and architectural/engineering fees. These expenses will help the lender determine the maximum mortgage amount that the borrower will receive. It's important to include all of the cost and expenses into the plan because this will help the lender determine how much money is really needed and allow them to correctly assess the necessary mortgage amount for the project.

Once the borrower receives the funds from the mortgage, repairs on the house must begin within 30 days after closing and be completed within six months of closing. An approved FHA official will verify that the project is complete and the borrower may begin enjoying their beautifully renovated home. Help bring new life into an old home with an FHA 203K loan!

With more than 10 years of experience in magazine and print I strive to educate and inform my readers on the progressions and complexities of FHA mortgages in today's marketplace. In addition to writing, I am a professional photographer and ballroom dance teacher that enjoys hiking, and most of all, spending time with family and friends.
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Wednesday, April 22, 2015

Can I Take an 8-Unit Building & Convert it to 4 Units with a 203k?


This is one of the unique aspects of a 203k loan. You can take 5, 6, 7, and 8 unit buildings which are considered "Commercial" buildings and convert them to one to four residential units under this program.

Years ago we had such a project that was eight studios, the building had been vacant for many years, it was gutted.

All the drywall was gone, the wiring had been stripped out of the building, and all of the copper plumbing supply lines had been removed from the structure. Otherwise the building was in pretty good condition. The "bones" were good, the foundation seemed to be in good shape. Even the roof was adequate and we could easily say it had 2 years remaining economic life.

When the buyer was identified we went into action to determine just how many units would be feasible. We determined with the borrower's assistance that a 3-bedroom and three 4-bedroom units. The rents would be $1500 each for the four bedroom units and the borrower could live in the 3-bedroom unit. The rental income would be calculated at $1500 x 3 + $1200 x 1 = $5700 then at 75% or $4,275 per month additional income to help the buyer qualify for the loan. That is an additional $51,300 added to the annual income.

Typically if you qualify for a SFR you may also qualify for units as their income can be used to help you qualify for the loan. This is quite often enough to help the borrower qualify.

Sunday, April 19, 2015

Renovation Debate in Houston

To renovate or not is the big debate with a Houston couple's home search.

Thursday, April 16, 2015

Nice House But the Colors Are All Wrong


To each his own. I see this all the time where the buyer and a complete different idea of what "looks good" on a home. Did you know you can do a streamlined k (soon to be renamed Limited 203k) and just do painting if that is all that it needs?

The Limited 203k (we may as well start getting used to it) is great for those small repairs projects or simply changing the floor coverings, or repainting the interior or the exterior or both.

When the repairs are non structural and the cost of those repairs doesn't exceed $34,200 it may be a simple solution for your clients. What? Did I hear someone say their clients is putting 20% down and has great credit? In that case use the FannieMae HomeStyle® Renovation Mortgage which works just like the FHA 203k but has no PMI requirement when putting down 20% or more.

Tuesday, April 14, 2015

FHA 203K Loan - The Best FHA Home Loan to Rehab a Home!

To understand what a FHA 203k loan is we must first understand what exactly a FHA home loan is. The FHA -- Federal Housing Authority -- offers government guaranteed loans to home buyers which gives the banks the confidence to lend money to people they may not normally grant a mortgage to.

This is not to say that the you are borrowing money from the government nor is it to say that by applying for a FHA home loan you will automatically be approved, but it is to say that you are more likely to approved for a FHA home loan than a conventional loan if you have average or below average credit, including a bankruptcy, and less than 20% for a down payment, currently the down payment requirement is 3.5% -- which is considerably lower.

Now that we understand the basics of a FHA home loan, it is time to introduce the fact that in addition to the standard FHA loan offered, there are many other FHA loan programs that home buyers may wish to take advantage of including the traditional 30 year fixed rate mortgage, standard 15 and 20 year mortgages and even any manner of adjustable rate mortgages as well, you can even get qualified for refinancing or taking out the home equity via a home equity loan through FHA programs as well.

It seems, though, that one of the most popular FHA loan programs that are offered is the FHA 203k loan. These loans carry the standard features of traditional FHA loans -- flexible credit, assumable loans, and low down payment to name a few -- but goes a step further by making it easy to rehabilitate a home all in one loan packaged together.

Using an FHA 203k loan can help people who need to renovate their current homes by securing financing to do so or home buyers can use these loans to purchase and rehab a preexisting home elsewhere.

This can benefit everyone involved from the community by making surrounding areas nicer for all citizens, to the home owners themselves by allowing them to purchase what could be their dream home and providing the funds to make their dream a reality. All of that and under one loan package, in today's unstable housing market, taking advantage of FHA programs is definitely the way to go.

With the glut of foreclosures on the market including HUD homes for sale which some of them requires repairs, the FHA 203K Loan may be the answer to purchasing your dream home at a bargain price!

Click FHA 203K Loan [http://www.fha-loans-information.com/] for more information on FHA Home Loans! Learn more about buying HUD Homes For Sale click Streamlined FHA 203K Loan [http://www.the-hud-home-expert.com/FHA203Kloan.html].
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Friday, April 10, 2015

Award Winning 203k Software for Consultants and Lenders


We received an interesting call the other day from a competitor who was trying to sell their software to one of my staff consultants. We learned all kinds of stuff about our software and what it couldn't do. We had to laugh because in every instance we could do what they said we couldn't do and what makes it more interesting is that we have been doing all of those things for 8-10 years in all cases.

I can't tell you what our competitor's software may or may not do, I would be fooling myself to be so presumptuous. What I can tell you that our software was voted the easiest to underwrite for it's output by a national association of mortgage lenders. 98% of the 400 attendees told the story for us. I can also tell you from actual experience that I took over two projects recently from two different "consultants" both using our competitors report software and it showed me just how far superior our software is to the competition.

The reports were confusing and poorly put together. They required too much reading just to see there is nothing there to read. If you are using this other software I can now tell you without a doubt that you are using a toy when compared to our product. You will save about an hour writing each report and about a half hour to an hour in performing each draw inspection. Every consultant I have talked to that admits to using this other software isn't happy with it but they are used to it. So we have offered a solution. A FREE 3-month trial of our product to any existing consultant so you can actually test the product and our claims. All I ask is that you read the user's manual we provide. If you feel you would like to actually watch a project being written we can set that up for you as well.

Why do I say for "Lenders" too? There are allot of streamlined k loans out there, soon to be called the Limited 203k btw. Lenders use our software because it is so very simple to learn and navigate. It also allows you to input up to five trade contractors and then kick out separate HomeOwner/Contractor Agreements and separate "Scopes of Work" for each contractor in addition to all the other paperwork you may need to complete a project. There are a number of lenders who "require" the use of our software to speed their underwriting process. We do offer our lenders who agree to use our software output exclusively a special discount to their consultants. This helps the lenders close loans faster by being able to have that consistency and brevity.

Our software has been on the market longer than any other nationally sold consulting software.

Tuesday, April 7, 2015

What Is A 203(K) Consultant?

Those looking to fix up a home, remodel or repair a run-down property may apply for the Federal Housing Administration's (FHA) 203(k) loan. The loans are offered to those who want to repair or fix up a home that has run into disrepair and live in it as their primary residence. These loans help reduce the risk that would otherwise have to be undertaken by a primary lending agency. Mortgage payments during the time of the remodel may be covered up to six months by the government. Down payments are reduced to encourage revitalization of neighborhoods. Only 3.5% of the purchase price plus repair costs need to be accounted for as well as good credit and steady income to apply. In order for the loan to be secured you will need to work with a 203(k) consultant.

Do you need a 203(k) consultant? What can they do for you? A 203(k) consultant is approved by HUD, or the government agency that oversees home mortgage lending practices. HUD stands for Housing and Urban Development. Consultants must be approved by a HUD field office and trained using their specific Work Write-Up Forms.

To begin with, a 203(k) consultant will view the site with the potential borrower. Together they will walk-through the site as the consultant assesses the amount of work that needs to be done and whether or not it's possible to do the project. If the consultant gives the go-ahead, an agreement is signed and the client pays a retainer for services.

The second part of the service is where the contractor's HUD training comes in. They prepare a detailed Work Write-UP. This lays out line-by-line costs associated with project. Included in the Work Write-Up are project specifications, construction costs analysis and HUD-required draw request forms. They also prepare bid packages and lender packages.

The next step is to deliver the Work Write-Up packages to the borrower, lender and contractor. After that the borrower finds a contractor to work with. It's important to note that lenders have requirements that contractors have to meet. Contractors must know about the 203(k) process and how it will apply to the work they do.

Finally the loan closes. Repair funds are put in escrow and the actual work begins. After that, the consultant performs draw request inspections. During this phase the proper permits must be issued. As the building progresses a punch list is drawn up. Finally the project is completed and warranties and lien releases are gathered.

This type of investment isn't for everyone, but for those interested in restoration of homes can find themselves a great deal if granted a 203(k) loan.

San Diego Home Inspector is your resource for prompt, honest and reliable home inspections and commercial property inspections. Our mission is to provide home inspection services that make a positive impact on the local community by protecting the physical and financial well being of our clients. Visit San Diego Home Inspectors today.
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Saturday, April 4, 2015

Meet Pete Campbell our guy in Fort Pierce FL


Meet Pete Campbell our guy in Fort Pierce FL

We are highlighting Pete this month as he is a "go getter" and has taken to the FHA 203k consulting like a duck takes to water. I have trained allot of consultants all over the country and not all of the get it like Pete does.

He is also personable and understands that this process is all about the client. Not him. Helping that home buyer or home owner achieve their goal of home ownership and getting that home fixed the way they want it to be fixed for the most part.

What do I mean "for the most part"? Well, there are some HUD hot buttons. Things that we are required to repair even if the client doesn't want to.

I know, what are they, right?

1) Insulation - we must have attic insulation

2) Caulking - One type of caulking is for the exterior envelope of the home, doors, windows, etc to keep out air infiltration... to make the house tighter. The other is interior caulking around sinks, bathtubs and the like.

3) Electrical - we must have a breaker panel of at least 100A-220V. GFCI's and smoke detectors too.

4) Health and safety issues must be corrected
who can tell us the other mandatory repair(s)?

Wednesday, April 1, 2015

203K Loans

FHA 203K Loans

Are you interested in purchasing a fixer-upper home? If you know that the home you want to buy needs repairs and you are worried that you cannot get enough money back from your mortgage to make these repairs, then you should know about the Section 203(k) program offered by the FHA. Through this program you can purchase a home and get the money you need to fix-up the home financed into the mortgage.

For instance, if you want to purchase a home that is currently valued at $400,000 but it needs $50,000 worth of repairs many mortgage companies will not lend you more than the appraisal value of the home. With the FHA 203(k) program you can borrow the money to purchase the home and fix it up.

What types of homes can I purchase through the FHA 203(k) program?

You can use the program to purchase single family homes, up to four unit buildings as long as you live in one of them, and condominiums. There are certain restrictions for condominium repairs that you should consult your FHA approved lender about before purchasing.

Do I have to live in the home I purchase?

Yes. The FHA requires you to occupy the property you purchase.

Can I convert a single-family home into a multi-family home?

Yes. The FHA allows you to use the rehabilitation money from the loan to convert a single-family home into up to a four-unit home. The FHA also allows you to use the loan to move existing homes onto a new site if necessary.

What if the home I want to purchase need torn down and re-built, can I use the FHA 203(k) loan program for this?

Yes under certain circumstances. If you need to tear down the existing home and re-build a new home then you can use the 203(k) loan money as long as you are able to use some of the existing foundation.

How much can I borrow with an FHA 203(k) loan?

You can borrow up to 110% of the value of the home AFTER the repairs and rehabilitation of the home. The FHA will do a current value appraisal of the home in order to see what it is worth now. Then they will consider all of the rehabilitation you plan to do and do a second appraisal for what the home will be worth after the repairs have been made to the home. If you plan to install solar energy systems as part of your rehabilitation the FHA will insure up to 20% more of your mortgage values which means your lender will loan you more for your repairs and it will be easier to qualify for the loan.

Is there a minimum amount I need to borrow to make home improvements under the 203(k) program?

Yes. The FHA requires you to borrow at least $5,000 for repairs to the home in order to use the 203(k) program.

What improvements are allowed by the FHA?

The FHA requires you to make your home more energy efficient, but optional repairs that you can finance into your loan include:

• Repair to the structure of the home. This includes framing, chimneys, foundations, siding, new additions to the home, roofing, basement finishing, and more.

• Repair or the new building of bathrooms.

• New windows and/or skylights.

• Remodeling kitchens and new appliances.

• All types of flooring repairs or new flooring.

• Any repairs that are needed for safety like mold removal or lead paint.

• Repair to internal systems of the home like electrical, plumbing, heating, air conditioning, and ventilation.

• Repair or replacement of wells and septic systems (note that these repairs must be done first).

• Remodeling including new light fixtures, bathroom fixtures (even whirlpool bathtubs), painting, and more.

• Outdoor improvements including decks, patios, covered porches, landscaping, walkways, driveways, fencing, and more.

• Any rehabilitation that is necessary due to accessibility reasons for disabled people.

Once I have the loan money how long to I have to make the necessary improvements and repairs?

When you get a FHA 203(k) loan you sign an agreement that specifies what time frame you have to complete the repairs. You have to begin the rehabilitation within 30 days of signing the agreement and receiving the money. The rehabilitation must be completed within 6 months and any pause in the work cannot last for more than 30 days straight. This means that if you have different contractors working on different parts of your rehabilitation plan you need to make sure that there is not more than a 30 day stretch between the end and start of each contractor.

What if the price of the repairs increases once the work begins, can I borrow more money to cover the cost?

No. You need to find a contractor that can give you an accurate price before you take out your loan. Once you have the loan you cannot borrow more money. Discuss this with your contractor when you have the estimate done so that they know you cannot afford to go over the estimated cost.

I am not going to live in my home while it is being repaired, do I still have to make the mortgage payments out-of-pocket?

No. You do have to make the mortgage payments, but the FHA allows you to include the cost of your first 6 months of mortgage payments into the loan so that you do not have to try and bare the burden of paying your new mortgage and rent to live somewhere while you home is being rehabilitated.

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