Friday, September 4, 2015

Menlo Park Renovation Not Necessarily a 203k

Menlo Park, Redwood City, Palo Alto, East Palo Alto or anywhere else in the country for that matter.

There are serveral options for your next renovation project or remodel project.

FHA - The FHA 203k loan has been around since 1961 and stil is one of the best options for the masses. It is the easiest loan to qualify your buyers, recent bankruptcy can be explained in many cases, low down payment of 3.5% on a purchase, sometimes nothing down on a refinance if there is equity.  Work in progress is okay.

This loan program is good for any single family home [Loan amounts up to $625,500] or 2-4 small income units [Loan amounts up to $1,202,925 for a 4 unit property]. I had a client call last week about 4 houses on one lot. Yes, that would be considered 4 units for the purposes of this loan program.

These are low interest fixed rate loans that have a low down payment requirement of 3.5%. There is PMI [private mortgage insurance] that is required under this program.

If you are a Native American Indian we have another FHA program called the FHA 184 that you can get a 2.5% down payment and the construction money. Your client can also build from the ground up on virgin land if they so desire.

Conventional - Fannie Mae has a program called the "HomeStyle® Renovation Mortgage". A buyer under this program that puts down less than 20% will have PMI but can get in with as little as 5-10% down, investors can purchase or refinance and get money too but the down payment requirement is a little higher. Work in progress is okay.

Non-conventional - There is another renovation loan ONLY for single family homes that has a maximum loan amount of $3,000,000. NO work under construction with this loan program.

Last week we were talking to several clients who asked about their purchase of homes in the $750-900,000  range with $200,000-400,000 in renovation or remodeling. That would be perfect for this loan program. Your credit must be over 750 as I understand it and this is ONLY for single family homes with NO construction in progress.