Mike's 203k Blog

203K: Why is it so difficult to find a contractor to do this 203k? Answers within...

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 16 Jun 2013 16:24:08 -0700

Brent wrote this article and I think he is right on the target as to why it is difficult to get some contractors on board with the program. The sad part is that it is not much different than what they do everyday. I had a client call me yesterday to see if they could get the names of some reliable contractors in their area. Turns out their contractor had been working with them for over a month when, the day before closing, he backed out. He just wasn't solid in his understanding of how he was going to get paid.

Via 203K World - Maryland - Baltimore - RENO Maryland / DC's #1 Reno Lender /AS-IS-EZ (Brent Kluge - FHA 203K - HomeStyle- JUMBO Reno Loan):

By and large, Contractors are a tradesmen, some better businessmen then others, but nonetheless, the primary need is for them to be good at what they do, their trade. When we, as comsumers/homeowners, need to find a contractor to do a renovation job for us and we utilize the FHA 203k loan progam, it can be quite difficult to find a contractor that is qualified or even interested in doing this work!

Below are some items that will help you understand why and perhaps help clear up this disconnect and bring you to understanding during your contractor interview phase.

1. Contractors do NOT get money up-front:   (this is only true for a full K, not an FHA 203K Streamline [see previous blogs on differences between full k's and streamlines]). The streamline is relatively new, so most contractors will hear of the 203k and say "No Thanks". Make sure you are clear as to the type of K you are doing and communicate the pay structure to the contractor during this process. Plain and simple, most contractors are accustomed to receiving 1/3 of their contract upfront or during contract signing. This is "seed" money to start the project and buy materials and front some labor expense. GOOD contractors will not spend this money and keep it set aside for the job, budget enough to carry them to their next draw and hold profit until the end of the job... but alas, not all contractors are created equal. Since the K allows for no inital draw until work items they are requesting the draw on are completed, this limits the contractors that will even take this kind of job as not all have the money to front for labor and material.

2. Contractors must pass Muster: It is a requirement of the FHA lender to evaluate the contractor's credentials and qualifications and document these items. When a contractor signs on to do this K, he must have his documents in order. Local Licensing, regulatory licensing, liability insurance, worker's compensation insurance, trade references, ability to provide a properly written contract, all are checked and copied. They are required to sign all necessary 203K docs as well, Homeowner/Contractor Agreement, Specification of Repairs, etc... where they typically have not seen this paperwork and may seem overwhelming to them at times. Bottom line is, these checks are there to protect the homeowner, so the contractor you select must not mind the microscope. :)

3. Contractor Bids are scrutinized:   Typically, an FHA 203k Consultant is utilized in the transaction. He will be on the job for the duration of the project, from working out the items required to bid the job, to filling out all draw requests and inspecting all work to ensure it was done properly and professionally. I would liken it to not only having a micromanaging boss that is constantly looking over your shoulder at what you do... and you can't do anything about it. THIS IS A GOOD THING for the homeowner. They should have another set of eyes on the job to ensure work is being bid and finished professionally, but there are only certain contractors comfortable enough with their work to continue to sign up for this...

4. Check Delay /Holdback:   If a new shingle roof is the first item on a large renovation (and typically is as getting the house "Under Roof & Waterproof" is done first), for instance has a total line item price of $15,000.00, when the roof is completed he will request the draw. Every time a contractor requests a draw, the HUD 203k Consultant comes out, inspects the work, and details the percentage of that line item completed on the draw request, in this case 100% completed, so the draw request is $15,000.00. That draw request must be signed by the homeowner, contractor and Consultant, then forwarded to the draw department servicing the loan. These departments have varying work loads, and if you catch them when they are backlogged, it could take up to 3-4 WEEKS to receive that first check! (typically, they are 10 days or so). In addition, they do NOT receive the entire 15K for that draw. The draw department will keep 10% of every draw as "HOLDBACK". This money sits with the draw department as a bit of an insurance policy for the contractor to complete the entire project, then that money is released. This was enacted to counter those contractors that would take the K jobs, cherry pick the "money items" on the work write-up and then abandon the job. Once again, measures that protect the Homeowner, but one more item that makes it difficult for the contractor.

The answer here is understanding the guidelines and setting proper expectations through communication. The will ensure nice workflow throughout the entire project and no surprises for either party. :)

Good luck, enjoy your lives, buy houses, make them homes and make equity!

Kluge Out!

Brent Kluge

Cell: 410.591.8300

Fax: 888.557.5271

info@203kworld.com

www.203kworld.com

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

Skype name: the203kconsultant

I'm a contractor, can I work on my own 203k project?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 16 Jun 2013 08:58:26 -0700

I'm a contractor, can I work on my own 203k project?

My first question would be what kind of contractor are you? Then, is that the kind of contractor that's needed on this project?

If your project requires a general contractor, and you are a general contractor, then you likely can do your own work. But do you really want to? I know it sounds like a good idea because you think you can save yourself money. In reality it takes you away from what makes your money.

Your project will take a backseat to every other paid job you get a chance to work on. I'm sorry, that's just the blood reality of it. You also have the paperwork nightmare. The lender will require you to keep very careful records as to who you paid for what, much more than if you just were contractor on someone else's 203K project. You will never be paid for your own labor.

The good thing is you can get paid for labor paid out to others, but you have to prove it.

If you want to do self-help and be your own contractor, and put up with all the paperwork, we still have to create a scope of work with enough money, labor and materials, to complete the project with a different contractor. This is done just in case you flake out on us and don't get the job done in a timely manner. We will then have the money set aside to complete your project in spite of you. So what have you really gained? Your borrowing the money to complete the project. You complete the project and don't get labor for yourself. The extra money pays down on your mortgage, but your payment doesn't change. What have you really gained? Was it worth it?

So you had a $100,000 project, and you saved your 20% profit and overhead. You're fooling yourself, because the overhead was still there, and you worked for free. In reality you save maybe 10% which would your profit on this project. You didn't save any overhead because it cost you to hire people and manage them. So you put yourself through all of this extra work for nothing. Had you taken on another job that would've paid you labor and materials you likely would've been better off. Then you and your spouse could have been angry at the contractor who didn't finish the work on time, and you to can be on the same side, the winning side of this project. On the other hand had you done the work your self, your spouse is the only one that can be angry at the contractor, and who is the contractor? YOU!

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can I paint my own house on a 203k loan?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 16 Jun 2013 08:41:29 -0700

Can I paint my own house on a 203k loan?

Yes you can paint the interior of your home on a 203k but NOT if you want it to count for value on your appraisal. Be careful, everyone thinks they are a painter. Why? It is beyond me. Most aren't.

No you cannot paint the house. This is the answer I like to give everybody.

The problem becomes in whether or not the paint is so bad that it has a negative effect on the value. The appraiser will force us to put interior paint into the scope of work F they feel the paint is so bad that affects the value. Second problem with that is if the borrower wants to paint the house with proceeds from the loan they will not get paid for labor only materials. Third problem is that the contractor needs to get in and get the work done and get out. Many times when the homeowners painting there in the way of the contractor's progress.

So, can I paint my house on a 203K project? Answer is yes and no. If you want me to recommend that you paint your house on an FHA 203K loan, that won't ever happen. I have found over the years that it's best to let the professionals do what they do well, and you do what makes your money. In other words stay away from the house, let the contractor finish all the work, and move into your finish house.

What I don't like to see is someone buy a new home, do the bare minimum work, and then spend every waking hour, and every weekend doing what they could have done by a contractor for half the price. Don't be a slave to your new home.

Do you really have the equipment, time, and expertise, to paint the exterior of your home? In many cases painted the exterior the home require scaffolding - do you have scaffolding, most borrowers do not. If you are a grocery store clerk, do you really know how to paint the exterior of your home? I know you think you do, but in reality you don't. First thing you have to do is convince your consultant that you have the expertise, equipment, and most of all the time the paint this home.

Are you familiar with the EPA RRP techniques for curing cracked peeling paint, or dealing with lead-based paint on older homes. As a consultant I am not going to school you regarding the EPA RRP techniques, that's not my job. Most lenders want you to be a licensed contractor before you can work on your home. That way there's no doubt that you have the experience, and ability, to do the work. But it just becomes an issue of do you have the time to do the work. In most cases a contractor doing his own work will always let his works slide and put it off, over and over again if he hasn't paid job that he can go do.

Were doing a home right now in which the borrower wants to paint the interior of the home. The problem is that the people that were living there provided lots of crayons to their children and had them draw pictures all over her the interior walls all over the house. It looks like graffiti in its early stages. This amount of interior problem painting has a negative effect on the value of the home. If we don't put it in our work scope than the appraiser will deduct value. Many homes are coming in under value right now therefore this would be a bad thing. Just one more reason to let the professionals do what they do best.

If you want to count the fresh paint in the valuation of your home then it must be in our scope of work for the 203. For it to be in the scope of work and should be completed by the contractor in a professional, workmanlike manner, and not by the borrower. Let's revisit the question, can I paint my house on a 203K project? I would like to say no, absolutely not. The money you might save on labor still has to be built into the scope of work, the contractor has to agree to allow you to do that work, and any savings you made on the labor is applied to the loan and pay down on the mortgage. This requires additional documentation and monitoring. So, you might save a dime, but you're going to cost the contractor and the consultant a dollar to do it.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

What about mold issues, can we clean that up with a 203k?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 15 Jun 2013 22:42:48 -0700

What about mold issues, can we clean that up with a 203k?

Yes, mold, asbestos, pet stains, and anything like that can be part of the FHA 203k repairs. We do mold testing so we see our share of mold.

I once had a job at the "Cat Lady's House" what a smell. One of the most difficult smells to really get rid of for sure. Most houses we deal with show signs of animal stains, how can any home be yours till you change the carpeting and clean that sub floor?

This pipe or flue to the right is transite pipe and is commonly known to contain asbestos.

Quite often there will be asbestos paper wrapped on the duct work in older homes. I used to wrap asbestos paper on the fittings when I was a kid. Of course we didn't know it was bad for you. It is now commonly known to be a health hazard but only when it is friable In this case it has been damaged and must be repaired. This particular type of wrap is called "Air Cell" but it is very much like a cardboard box with asbestos paper used as the outer liner and foil as the inner liner.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can you recommend a contractor for my 203k project?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 15 Jun 2013 19:32:33 -0700

Can you recommend a contractor for my 203k project?

Lender's answer "nope" or "no can do" but as a 203k consultant we can recommend contractors and what is more important in my mind is that we also can put contractors who are inadequate for the program on a "do not use list" that lenders tend to honor.

Most contractors who are licensed in states where licensing is required are okay to do the FHA 203k but many of them are not financially adequate.

I had a call earlier today with someone asking for some referrals in the Santa Cruz area of CA. I don't really like calls for just that, referrals as we like to know something about the project. There are contractors we can recommend that do lots of foundation repairs like Diversified Specialists, Inc. - Kent Fridolfsson. Kent has bid on a couple of foundation repairs and look at a few more.

I remember one in Orinda that Kent looked at for us had a wall about fifteen feet high that wasn't engineered but the seller was a contractor and said it was adequate... some testing revealed it wasn't adequate They were starting construction on the hilside above this property, could you imagine what might have happened if we had merely assumed the wall was adequate and built the addition on top of it, then with the contraction at the top of the hill and the additional weight on that hill may have collapsed the subject property. Holy Cow!

Another one Kent did for us in Walnut Creek. The foundation had been settling for years and the owners merely kept shimming it up as the foundation fell away from the sill plate, just add another shim. There is pretty much nothing we can't repair or replace on a home but you need the expertise of an engineer and this is an "engineering contractor" who has the ability to asses the issues and the expertise to fix them.

Is there a contractor list for 203k approved contractors, yes there is... 203kcontractors.com

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can I replace a failed septic system with the 203k loan program?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 15 Jun 2013 09:52:38 -0700

Can I replace a failed septic system with the 203k loan program?

Yes, but it must be a FULL or STANDARD 203k. This work would be considered "structural" and therefore should not be attempted with a streamlined k loan. Now that I have said that there is a major lender that says they have done hundreds of septic replacements all under the streamlined k program. This could bite the borrower as it doesn't then comply with the program guidelines.

I actually received a call from a HUD official instructing me to get the word out that this repair is ONLY available with the FULL or STANDARD 203k.

There are allot of homes that have septic systems that have been sitting idle for a year and more that have dried out and no longer function, the REO managers either don't now it or do know it and should be disclosing it with a note that this is an FHA 203k candidate or FannieMae HomeStyle candidate due to the septic issue.

We have several replacements or repairs going on right now or in the past few months in Vacaville, Langunitas, Templeton, Sanger, and Visalia to name a few. Call us if we may be of assistance...

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can I add appliances to my FHA 203k loan?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 15 Jun 2013 09:36:13 -0700

Can I add appliances to my FHA 203k loan?

Short answer is "YES" you can.

Lets see, do you want to keep this hood and range while renovating this home? I wouldn't. We replace appliances all the time with the FHA 203k loan program.

The stove to the right has the ability to burn firewood to cook your food. Note there is no range hood at this home but it does have high ceilings so the room will get a whole bunch of smoke in it before you thiink to open a window.

Yes, you can add appliances to the list of repairs on your FHA 203k loan and they have so many styles to choose from. Go for it!

Got questions? bring them on...

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can I replace a failed retaining wall with the FHA 203k loan program?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 15 Jun 2013 08:51:57 -0700

Can I replace a failed retaining wall with the FHA 203k loan program?

Yes, you can. Some of the questions we get from time to time puzzle me but yes. you can replace or repair a failed retaining will with this terrific program.

HUD/FHA are all about Safety, a failed retaining wall is a safety hazard so it can be and should be included in the repairs of the home. You need $5.000 in "necessary work" before you can use the full 203k program and health and safety items are the easiest and most obvious way to reach that plateau.

We see all kinds of retaining walls in our everyday work schedule. Here are a few examples of some of the retaining walls we have seen recently.

Any and all of them can be used in the process of an FHA 203k repair there is no restriction on the type of retaining wall. There are some rules about having them engineered if they are of a certain height however.

The walls to the left are considered engineer or in this case pre-engineered retaining walls. This wall was on a project in Santa Cruz County.

Stacked stone retaiining wall to the right was also found in Santa Cruz County.

We are installing a wall like the one to the left in Marin County and the piles will extend more than 12' under ground.

There are walls for every situation. Note how straight this wall is and this one is over 15 years old, no leaning or deflection since it was installed.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k and mold issues in Sonoma

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Thu, 13 Jun 2013 10:43:40 -0700

FHA 203k and mold issues in Sonoma

Mold can become an issue anywhere but this particular issue came up in Sonoma. there is rarely an issue that can't be repaired. Though I have seen three homes in my career that were burned in place due to mold issues.

This home was being shown with the mold removed as seen in these photos

Most mold issues can be repaired and quite nicely.

If you have a listing that has mold issues, it is simply an FHA 203k or FNMA HomeStyle loan, it is not a lost cause and we can bring that home back into production. Your home inspector NEVER kills a deal, they merely help you identify when the financing should be 203k

.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k job site safety - graphic not for the faint of heart

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Mon, 10 Jun 2013 15:44:01 -0700

FHA 203k job site safety

Items to consider on every renovation project that concern the safety of the workers as well as the home owner.

I was reminded today when I saw this pile of concrete with nails sticking out all over it that we can't get lax in our quest for a safe job site experience.

I have seen nothing like this in quite a while. The contractor agreement indicates the contractor will leave the job each day by securing the home and making it safe for the owners. It just makes good sense for the contractor's workers as well.

On another project this past week we saw these forms that had been ripped out and left with nails sticking up. I turned them over but notified the job superintendent when he arrived of what I saw when I got there. He was all over his crew for leaving it that way and assured me that this is not normal. I've been on jobs with them for many years and this was the first infraction I had encountered so I tend to believe him. I don't think I'll see this again on one of his jobs.

When I was just a lad, I stepped on a nail sticking up out of a board that went through the shoe, my foot, and out the top of the shoe.

You learn pretty fast that you don't step on boards on a job site. If you ever find a board with a nail sticking up "TURN IT OVER RIGHT THEN" so what if your hand gets dirty, you may save yourself or a worker from stepping on it and getting hurt. It isn't good enough to tell someone about it, JUST DO IT... NO Nike didn't invent that slogan, it has been around long before they started using it.

I was talking with another contractor about workplace safety and he shared this photo with me where one of his employees shot his own finger with a nail gun... sorry (DON'T LOOK - TOO LATE, MABLE HAD ALREADY LOOKED)

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

HAHI conference coming to Orlando FL end of July

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 09 Jun 2013 10:33:46 -0700

HAHI conference coming to Orlando FL end of July

Like any good thing there is continuing education that is needed to maintain your edge in the market. These conferences held all over the country by various groups are a great way to get your mandatory continuing education for the year at one time and condensed into a few short days.

I really enjoy getting to see so many of you in one place to renew our friendships and meet new people who are staying ahead of the education curve. As you know our course is approved for 15 CE credits with HAHI - National Association of Home Inspectors as well as with ASHI, NACHI and CREIA.

We are planning to be there to handle your FHA 203k questions as well as questions regarding how you can get into these inspections to add to your home inspection business. Click here to get more info on the NAHI conference

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Black sand beaches in Pacifica CA

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 08 Jun 2013 17:20:32 -0700

Black sand beaches in Pacifica CA

FHA 203k project in Pacifica brought me to this beautiful black sand beach

I was working on a home in Pacifica that is a rebuild from the foundation up when we finished the draw inspection... just demo was completed, we went to lunch at the beach and though I have been to lots of CA beaches this one was the first black sand beach I've seen in CA. I know, it is not really black sand but it looks pretty. It is this color due to being very wet as the tide was in.

One of the most popular surfing spots in CA is still right here in Northern CA at Pacifica. NOT HERE but just about a half mile north of this area.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Is there really a town in CA named Box Springs?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sat, 08 Jun 2013 10:03:53 -0700

Is there really a town in CA named Box Springs?

FHA 203k loans are even available in Box Springs CA, who would have guessed?

I find it interesting that so many people in general don't know about the FHA 203k program, and of course the public doesn't know much about it. Why not, it is a great program and is has been around for 52 years now. Yikes! Can you believe it? If you ask a hundred Realtors there may be a handful that actually have used a 203k loan on a project. It is the best solution for a home buyer purchasing a fixer.

All kidding aside Box Springs is near Moreno Valley and Riverside CA. check i tout by clicking here

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k and Mixed Use Buildings, perfect for each other in Corona

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Fri, 07 Jun 2013 07:14:17 -0700

FHA 203k and Mixed Use Buildings, perfect for each other in Corona

3.5% down payment available financing for a mixed use building in Sacramento CA or anywhere else for that matter. Lets hear from wherever you are. Idyllwild CA in Riverside County has a few, Compton, how about San Joaquin County and Stockton, you have more than twenty-five vacant mixed use buildings in the old downtown area. They are everywhere, all over Los Angeles, the time is now.

One of our partners just listed a mixed use building in Sacramento with a grocery store downstairs in the commercial use and residential on the floors above. I'll give you more information after the listing actually hits the market.

Where else can you pick up a mixed use property for 3.5% down and get money to fix up the residential aspects of the building? No where that I've ever heard and I've purchased quite a number of commercial and mixed use buildings over the years. What a marketing tool for your listing to be able to get it with this kind of financing.

Rules for mixed use include

NO renovation of the tenant improvements or the interior of the commercial portion of the building. That is okay because you normally let the tenant pay for those improvements or finance them into the term of the lease.
Income from the commercial use is not counted for qualification but a good portion of the rent from all of the residential units help the borrower qualify for the loan, even the unit they will live in.
Borrower must live in the property.
Single story properties can only have 25% commercial use, two story commercial use is restricted to the 1st level and only 49% of the total building as the stairs to the upper level is counted as part of the residential units, a three story building only 33% of the building can be commercial use, again it is the first level ONLY.

There is no better loan program available for this type property and a new investor who can live in it for a few years. Can you imagine having your office downstairs. You can break up the lower commercial level into one or more units. We had one in Oakland CA years ago that had five commercial offices on the first level and residential above.

Use your imagination, why fight with short sales, do something no one else is doing and be good at it

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k Officer Next Door program Idyllwild to San Francisco

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Tue, 28 May 2013 21:27:21 -0700

FHA 203k Officer Next Door program Idyllwild to San Francisco

50% discount off the appraised value for Police Officers, Firemen, and EMT officers on HUD homes.

Police Officers, Firemen, and EMT officers are in charge of keeping our streets safe and helping our citizens. The FHA 203k Officer Next Door program was designed to help Police Officers, Firemen, and EMT officers in targeted neighborhoods who purchase HUD foreclosed homes at a discount. There are a number of "low down payment" properties and other fixers that are HUD owned and they all have appraisals on them to identify the "as is" value for the properties. This is typically for full time Police Officers, Firemen, and EMT officers.

The point is that we want these cars and uniforms coming through the neighborhoods at odd hours and that alone has can be a deterrent to crime. Many officers live outside the community they serve and that is okay too.

Beware of bidding too high for a HUD foreclosed home. Example: If the home appraised for $300,000 and you think that you are going to get it for a large discount so you bid it up to $350,000 to be sure to get it... oops, not, for every dollar you bid over the appraised value you will have to add that difference to your down payment. Instead of coming in with 3.5% you have to pay $50,000 + 3.5% down payment. Therefore "DON'T DO IT". What I would suggest is that you do bid over the asking price but with pocket change. $10, $50, $100, something that won't break you and still puts you above most buyers.

Where do you find these properties? First you merely find a Realtor who deals with HUD properties and knows their way around that end of it to make your offer. It must come from an Agent or Broker. The original idea was that these homes had to be in targeted areas, Community Redevelopment Identified Areas. Be sure the property you are looking at qualifies for the Officer Next Door program. Your local lender can tell you more about this program and likely provide you with a Realtor who can help you with your offer. If you have a problem finding one try Edward Rogers with Wells Fargo Home Mortgage.

Agents selling these should build your commission in on the buyers side as these home don't get seller paid commissions from what I hear.

Oh, these are also availble for the FHA 203k program so you can get low interest money to fix them up too. That part isn't discounted however. Ed can explain more about this aspect of the program and he makes loans all over the USA.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k Teacher Next Door program

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Tue, 28 May 2013 21:11:53 -0700

FHA 203k Teacher Next Door program

How teachers can gain access to homes with 50% discount off the appraised value.

Teachers are in charge of our future leaders and voters. The FHA 203k Teacher Next Door program was designed to help teachers in targeted neighborhoods who purchase HUD foreclosed homes at a discount. There are a number of "low down payment" properties and other fixers that are HUD owned and they all have appraisals on them to identify the "as is" value for the properties. This is typically for full time teachers K-12 years.

Beware of bidding too high for a HUD foreclosed home. Example: If the home appraised for $250,000 and you think that you are going toget it for a large discount so you bid it up to $300,000 to be sure to get it... oops, not, for every dollar you bid over the appraised value you will have to add that difference to your down payment. Instead of coming in with 3.5% you have to pay $50,000 + 3.5% down payment. Therefore "DON'T DO IT". What I would suggest is that you do bid over the asking price but with pocket change. $10, $50, $100, something that won't break you and still puts you above most buyers.

Where do you find these properties? First you merely find a Realtor who deals with HUD properties and knows their way around that end of it to make your offer. It must come from an Agent or Broker. The original idea was that these homes had to be in targeted areas, Community Redevelopment Identified Areas. Be sure the property you are looking at qualifies for the Teacher Next Door program. Your local lender can tell you more about this program and likely provide you with a Realtor who can help you with your offer. If you have a problem finding one try Edward Rogers with Wells Fargo Home Mortgage.

Agents selling these should build your commission in on the buyers side as these home don't get seller paid commissions from what I hear.

Oh, these are also for the FHA 203k properties so you can get the money to fix them up too. That part isn't discounted however.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Renovation work must be completed in a workmanlike manner

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Tue, 28 May 2013 19:28:14 -0700

Renovation work must be completed in a workmanlike manner

All work on an FHA 203k project must be completed in a professional workmanlike manner. Here is a photo of an eave vent that was to be replaced... is it completed in a professinal workmanlike manner? I think not.

This home had 2 x 6 rafters and 5.25" x 22" eave vents were installed. This contractor wanted to replace them per the scope of work but he used a 3.25" x 22" eave vent intended for use on a 2 x 4" rafter.

He didn't find anything wrong with this installation but finally agreed to replace it once he realized no payment was ever going to be made till it was corrected.

To think that this contractor had been "validated" by the lender. Of course it was not one of our regular contractors and with this installation would likely never be allowed onto our permanent and recommended contractor list.

All he did was place an inferior size eave vent over the top of the original vent. Yuk!

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k Foundation Types

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Mon, 27 May 2013 16:06:10 -0700

FHA 203k Foundation Types

There are a number of foundation types that we run into on the FHA 203k trail.

this home has a concrete perimeter foundation with a grade beam running down the center of the structure to support the interior bearing walls.

This home has a concrete perimeter foundation, a grade beam running down the center of the home and then pier and posts holding up the floor between the two.

Here is a good scene showing the way the floor joist are supported by the concrete perimeter foundtion. Not a lot of room for crawling this one

This home had a basement with a stem wall running down the center of the basement much like a grade beam and it serves the same purpose of supporting the bearing walls above.

You want to know which walls are the bearing wall this is one place you can find out.

This home has a concrete slab foundation. This is not like a patio slab which is likely 3" think with no perimeter footing. On the other hand this type foundation does have a a perimeter footing and footings or a grade beam under the slab for support under the bearing walls.

Here is a photo showing that footing prior to a pour of a concrete slab foundation at this same home.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k contractor for Hayward and Castro Valley

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Mon, 27 May 2013 15:24:34 -0700

FHA 203k contractor for Hayward and Castro Valley

Get the name of our featured contractor for the Oakland Bay Area

This is one of our recommended contractors in the Hayward,Oakland area. Innovation Construction has a professional crew that gets in and gets the work done.

Andrew Puchkov, the President and operating manager is our contractor of the week.

Realtors are always asking us for a list of our contractors and we are reluctant to put that list out to the public as such but we will be featuring some of our contractors on a semi regular basis to take note if you want some good ones.

Andres has been on a few Standard FHA 203k projects with us an understands there is no "up front money" for these projects. The contractor must use their own money to get the project started then get reimbursed for the completed work during the "draw process"

This is where the contractor calls for a draw or payment for work completed, we make an inspection, and authorize the lender to cut a check for that work.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Bike paths in Berkeley CA

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Mon, 27 May 2013 14:50:08 -0700

Bike paths in Berkeley CA

This is a view of a bike path in Berkeley CA, no cars allowed. Bikers can feel pretty safe using these bike paths. I was doing a draw inspection about a block from here when I noticed this bike path and a number of bikers using it. Much safer than riding on the street for sure.

Here is a view in the other direction. You can see that allot of money was spent on these bike paths.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Can non profit organizations have access to the FHA 203k loan program?

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 26 May 2013 10:36:34 -0700

Can non profit organizations have access to the FHA 203k loan guarantee program?

this article will give you the information you need to get your non profit on the way to doing an FHA 203k project to benefit their organization and the surrouding community, anywhere in the USA.

Why would a non profit want to use the FHA 203k loan guarantee program?

Most non profits have a specific reason as their mission. Some want to assist in drug rehabilitation, while others may be a church and be active in their community. In either case they both can access the FHA 203k loan program as it is often called.

Consumers can purchase a home from a non profit who has just fixed it up.

Why not, the non profit has purchased a home, fixed it up and has to sell it for a low margin of profit. It makes perfect sense for a person to purchase that home and get a home that is all fixed up at a bargain price. It is the best of all worlds.

Why would a Realtor cater to non profits?

You teach them how to do it and get them qualified to purchase and they do it over and over and over and, enough already. That is what I used to like about the investors as well. Once you teach them it becomes a machine that buys homes, and more homes, and "you get the idea". If you have a non profit interested in regentrification of your neighborhoods we finally have a lender ready to move on it, and so many won't. It does take a bit more to get them qualified and ready to start buying properties but not on your end. The non profit has to jump through some hoops that is why only a few will do it. A few could mean an additional 6 to 10 homes sales per non profit per year. How many non profits shall we set up?

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Keep Your California Home Programs

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 26 May 2013 10:00:56 -0700

Jack is one of the most informed Realtors in the area and always is worth listening to. I just thought we needed to repost this story to be sure more people get to see it. Nice job Jack. Keep up the great work you do.

Via Jack Mossman - The Nines Team in Stockton (The Nines Team Realty):

"Keep Your California Home Programs." California homeowners who pulled money out of their homes are frequently confused about what, if any, options are available to them for assistance. The San Francisco Chronicle recently published a good primer of the possibilities. Since even the "Chron" had trouble keeping the pieces together, the California Association of Realtors® published a recent "Summary" of the article ... pointing out some of the resources that are available to California Homeowners falling into distress.

"Keep Your California Home" programs and eligibility requirements are shown in the overview. However, if a Homeowner still has a level of confusion after reading the summary and the full article, please contact a lending or real estate professional ... every case is individual and the results will vary from one homeowner to another.

Via the San Francisco Chronicle

Mortgage aid offered to those who cashed out equity

The California Housing Finance Agency announced this week that people who cashed out equity on their home now are eligible for three of the four "Keep Your Home California" programs.

MAKING SENSE OF THE STORY

 Keep Your Home California is a state-run program funded with $2 billion from the U.S. Treasury's Hardest Hit Fund. It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.

 There are four individual programs that fall under Keep Your Home California. Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.

 Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance, and transition assistance programs if they meet all the other program requirements. Homeowners who cashed out equity will continue to be ineligible for the principal reduction program.

 When the program first started, homeowners who had tapped the equity in their homes were ineligiblefor the programs. CalHFA decided to include these homeowners due to the large number of homeowners who were being turned away for assistance.

 Under the program revisions, homeowners who originated mortgages after Jan. 1, 2009 also are eligible for the same three programs. Originally, these borrowers were excluded because they also are excluded under the federal Home Affordable Modification Program, so CalHFA wanted to be consistent with HAMP.

 To qualify for any of the four programs, homeowners must fall below certain income limits, must be living in the home, and cannot own a second home, among other criteria. For additional requirements, click here

Read the full story

Hopefully most of your questions may be answered by the preceding resources. If not, please do not hesitate to contact one of our Team members for additional information or other resources.

888-868-4398

If you may be considering relocation to the Central Valley of California considering adding Stockton and Lodi, California to your interest list. The folks at The Nines Team will be delighted to show you our town … and some of the best real estate buying opportunities in the valley. If you wish to search the local MLS please click here. Don’t hesitate to call us if we can answer questions or get additional information for you!

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Kitchen range hoods

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Thu, 23 May 2013 23:00:39 -0700

Kitchen range hoods

See what you shouldn't use for venting a range hood

Range hoods draw fumes and "grease" from the range. Interesting? Then the filter gets dirty, filled with grease and debris over time, we all clean them weekly right? It is so simple to through that filter in the dishwasher and clean it.

On the other hand maybe we don't clean it very often, not often at all if you are like most people. What you end up with sooner or later is a grease fire.

What would be the best thing to use for the ducting? A smooth wall galvanized sheet metal duct of at least 26 gauge of course. Ah, but then you need an elbow, or two or some angles. Wouldn't it be easier to run "flexible duct" for your vent line?r hand maybe we forget for a while, a good long while, then a fire starts on the stove one day, the grease in that vent duct ignites and the fire department comes out to put out a large fire.

As a manufacturer of aluminum flexible duct for a number of years our UL approval clearly states that it CANNOT BE USED for range hood venting.

Why not use aluminum flex duct to vent a range hood you might ask?

The corrugations tend to attract and hold grease, a grease fire is eminent and it will burn right through the thin aluminum foil used to manufacture this product.

What made me sit up and take notice is that many times I see gas ranges with non vented hoods. Hoods that merely recirulate the CO back into the room. Then we see this one that has an electric range with aluminum flex duct as the vent. What else does this tell you? It tells me that this is a home owner installed application. It was easy to install and no one is interested in seeing they get the installation instructions at the local hardware box store.

There was also a smoke detector at the ceiling in the kitchen. I always find that funny because if you burn toast it will set off the alarm. Enjoy life and don't use flex duct for venting range hoods, please.

Interesting range hoods

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

FHA 203k Investor program

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Sun, 19 May 2013 05:57:55 -0700

HUD FHA 203k Investor program

This blog post will tell you about investor programs that include renovation money.

What are the basic investor programs

This is a program that lets investors "flip" properties, the same thing that FHA was condemning just a short time ago... like yesterday. Wow, I've received lots of calls and emails asking me what I thought of it.

it hasn't happened yet
when it does be ready for more work
we already have an investor program for those investors who are savvy and know how to use OPM (Other Peoples Money).

I thought that more people should have been sent to jail in the 1990's when they investors ruined a great program by committing fraud but we see fraud all around us and many times by the very people who were supposed to be the lawmakers. I watched a couple of investors in the 1990's who were literally making the market go up by selling property to each other at inflated prices to create "comps". I had been hired to do an appraisal once when I caught it. When I turned my report in and reported what I saw in that market the lender just stopped using me and chose to use another appraiser who could be fooled more easily.

In any case getting the investor program back along with some legal flipping, should help the economy. We have been pushing to get them back for over five years so I'm glad to see someone in the government has finally agreed with the consultants around the country to get this going. If the "escrow commitment procedure" comes with it we will really have a great thing going.

The escrow commitment procedure was where the investor could actually put a loan in place for 96.5% of the "after improved" value when the purchase the home.

Example: Purchase price - $250,000, renovation cost - $150,000 but say it is worth $550,000 once the work is complete. The ECP would allow the investor to put a loan in place for $550,000 less 3.5% down. This is an FHA guaranteed loan and, as you should already know, all FHA loans are assumable so it is no stretch for the buyer to assume this loan once they qualify for the loan and put their 3.5% down payment in place.

The sweet thing is that there is no new appraisal, and the buyer merely waits for the construction to be completed then moves in. The loan assumption can happen when the work is being completed and closed upon proof of that completion. Investors using this program would actually start marketing the property during the construction phase to limit their carrying costs during the course of construction.

Important renovation loan for investors available right now

We already have an investor loan program with the FannieMae HomeStyle loan program. Investors can purchase a property with a minimum down payment, fix it up and either sell it or keep it.

What do I think about the FHA investor program? I'll believe it is back when I see it, they have been telling us it would happen for so long now and it is like crying WOLF. It is time they did it as it will stimulate the economy. If you cater to investors, you should be telling them about the program. If you want to hold some investor education seminars we are happy to work with you in that regard.

FHA 184 Loan for American Indians

Mike Young, FHA 203k Consultant 707-812-7668, the203kconsultant (203kOnLine.com) — Thu, 16 May 2013 21:57:20 -0700

FHA 184 loan for American Indians

There are lots of loans program out there that can be used by anyone not just American Indians but there is one renovation loan product that is just what the doctor ordered. How about

2.5% down payment
Renovation like a 203k loan is okay
FHA product
Build a brand new home on virgin land
In most respects otherwise like an FHA 203k loan regarding health and safety, and "of necesity"
Follows the FHA MPS guidelines for livability

What better way to do a renovation loan than to build one from scratch all brand spankin' new? It is all about the casinos being built all over CA and large amounts of sudden income coming to a people long overdue their day in the sun. My wife is a product of the Choctaw Nation making me more interested in this program than most.

This can also be a RENOVATION LOAN, I don't want you to miss that aspect of this product, and you can fix up an existing home, add on to an existing home, all very much like an FHA 203k but it is actually in a different section. If you need someone to walk you through one let us know. It is called the FHA 184 loan. Since this is a federal program it is available natioinally.

If you are a registered member of a tribe or nation you can buy or build a home anywhere in the USA, not just in the state where that tribe or nation exists.

Mike Young, 203k Team Leader

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668

Skype name: the203kconsultant

Mike's 203k Blog

203K: Why is it so difficult to find a contractor to do this 203k? Answers within...

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I'm a contractor, can I work on my own 203k project?

Can I paint my own house on a 203k loan?

Can I paint my own house on a 203k loan?

What about mold issues, can we clean that up with a 203k?

What about mold issues, can we clean that up with a 203k?

Can you recommend a contractor for my 203k project?

Can you recommend a contractor for my 203k project?

Can I replace a failed septic system with the 203k loan program?

Can I replace a failed septic system with the 203k loan program?

Can I add appliances to my FHA 203k loan?

Can I add appliances to my FHA 203k loan?

Can I replace a failed retaining wall with the FHA 203k loan program?

Can I replace a failed retaining wall with the FHA 203k loan program?

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FHA 203k and mold issues in Sonoma

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FHA 203k job site safety

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HAHI conference coming to Orlando FL end of July

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Black sand beaches in Pacifica CA

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Is there really a town in CA named Box Springs?

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FHA 203k and Mixed Use Buildings, perfect for each other in Corona

FHA 203k Officer Next Door program Idyllwild to San Francisco

FHA 203k Officer Next Door program Idyllwild to San Francisco

FHA 203k Teacher Next Door program

FHA 203k Teacher Next Door program

Renovation work must be completed in a workmanlike manner

Renovation work must be completed in a workmanlike manner

FHA 203k Foundation Types

FHA 203k Foundation Types

FHA 203k contractor for Hayward and Castro Valley

FHA 203k contractor for Hayward and Castro Valley

Bike paths in Berkeley CA

Bike paths in Berkeley CA

Can non profit organizations have access to the FHA 203k loan program?

Can non profit organizations have access to the FHA 203k loan guarantee program?

Why would a non profit want to use the FHA 203k loan guarantee program?

Consumers can purchase a home from a non profit who has just fixed it up.

Why would a Realtor cater to non profits?

Keep Your California Home Programs

Kitchen range hoods

Kitchen range hoods

Why not use aluminum flex duct to vent a range hood you might ask?

Interesting range hoods

FHA 203k Investor program

HUD FHA 203k Investor program

What are the basic investor programs

Important renovation loan for investors available right now

Related blog posts

FHA 184 Loan for American Indians

FHA 184 loan for American Indians