In this market you'll often find the location of your dreams, but the house leaves you feeling sick inside.  You wouldn't or couldn't see youself living in such a place... but the view... the view is amazing!

FHA offers the 203(k) Renovation loan to solve this problem.  Here is what is offered:

FHA 203(k) Rehabilitation Home Mortgage loans are used to Purchase or Refinance and rehabilitate an existing One to Four family residences (Residence must be 1 year old) that will be used for residential purposes. FHA approved Condos are eligible as well.

Unlike FHA's Renovation Loan, Conforming loans a lender will not release mortgage proceeds unless the condition and value of the property provide adequate loan security and, therefore, will require completion of any rehabilitation before closing the mortgage. The 203(k) program is intended to help a purchase/refinance a house in need of repair or modernization without having to get a high-interest interim loan to purchase the dwelling and to do the rehabilitation construction and then secure permanent financing when the work is completed to pay off the interim loans.

A homeowner who purchased a property with cash can refinance the property using a 203(k) loan within six months of purchase, just as if he had originally purchased the property with a 203(k) loan, and receive cash back, less any down payment and closing cost requirement for the 203(k) loan.

Eligible improvements include items such as structural alterations, additions, reconstruction, remodeling, new siding, plumbing, painting, decking, heating, air conditioning, electrical systems, roofing, flooring, carpeting, energy conservation improvements and major landscape work and pool repair.

In some cases the mortgage requires both an appraisal on the as-is value of the property and an appraisal on the estimated market value when the work is complete.  The minimum investment, mortgage term and MIP( mortgage insurance Premium) are the same as under the FHA Purchase program (96.5% LTV). The mortgage amount may include funds for the purchase of the property or the refinance of existing indebtedness, the costs incidental to closing the transaction and the completion of the proposed rehabilitation.

203(k) maximum Loan amount is the lower of the following:

-    The as-is value, if appraised, or the contract sales price, plus the cost of repairs and improvements; or

-    The existing debt on a refinance plus the repair costs.

A 203(k) begins when mortgage proceeds allocated for the rehabilitation are placed into a rehabilitation escrow account. Proceeds allocated for the purchase of the property will be released, while those for the rehabilitation will be escrowed in an interest-bearing rehabilitation escrow account, to be released in draws as work progresses. Inspections of the work are performed by HUD-approved fee inspectors. A 10% holdback is required on each release from the rehabilitation escrow account.

Go from falling down to...................................... your dream home!

For question or scenarios, I invite you to call me....

Julie Chroust

925-516-5809