rehab: From a caterpillar to a butterfly - renovation loans - 05/08/12 04:35 AM
From a caterpillar to a butterfly is the best analogy for the purchase of a home in need of repairs when the home buyer uses one of programs designed to cover these repair costs.  There are three programs that may be available depending on the buyer's qualification, they are:
FHA 203 (k)
Homepath Renovation Loan
Homestyle Renovation Loan
This loan product allows for the costs of repairs, improvements, appliances, etc. to be built into the financing of the home. Repairs such as:
Carpeting
Cabinetry
Heating/Air Conditioning units
Painting
Roof repair or replacement
Windows
Appliances
There are some restrictions that should be noted:
… (18 comments)

rehab: FHA 203(k) Financing – Required Paperwork - 02/26/12 10:54 PM

In the previous post in this series, we discussed the eligible property types, eligible repair type, ineligible repair types and some general guidelines.  Once you have determined this is the best financing method there are a couple of things you should know about the required paperwork.
The FHA 203(k) financing program does require more documentation. Getting this right the first time will help expedite the process.
Here is what you will need:
·        Complete borrower credit package
·        FHA appraisal stating “as is” and “after improved” values on the same appraisal report's
·        Contractors resume
·        Contractors business license and … (3 comments)

rehab: FHA 203(k) Financing – Ineligible Improvements - 02/25/12 06:17 AM

You know the types of properties that are eligible and we have reviewed some of the basic program guidelines in the previous posts.  There are some types of repairs that will not be eligible for this program. 
These are:
·        Major rehabilitation
·        new construction including room additions
·        repair of structural damage
·        repairs requiring detailed drawings are exhibits
·        landscaping or site amenity improvements
·        any improvement that will take longer than six months to complete
·        Any rehabilitation activity that:
o   requires more than two payments per specialized contractor
o   requires architectural plans or exhibits or … (3 comments)

rehab: FHA 203(k) financing – Eligible Improvements - 02/25/12 05:55 AM

Okay, we have discussed the general guidelines for the FHA 203(k) financing program and the eligible property types. So, what can you do with the money?
Here is a list of eligible improvements that can be made:
·        repair or replace roof
·        repair or replace gutters and downspouts
·        upgrade plumbing system
·        upgrade electrical systems
·        flooring
·        exterior decks and patios and porches
·        MINOR remodeling (no structural repairs)
·        Interior painting
·        exterior painting
·        installation of new doors
·        installation of new windows
·        purchase and installation of new appliances
·        lead-based paint stabilization
… (2 comments)

rehab: FHA 203(k) financing – General Guidelines - 02/25/12 04:59 AM

The FHA 203(k) rehab financing follows the same general guidelines as the regular FHA 203(b) loan.
Here are a couple of program characteristics that apply to the FHA 203(k) loan:
·        allows the borrower to finance up to $35,000 for repairs
·        can be used with the $100 down HUD REO property
·        the repairs can be completed after closing
·        the loan must have an automated underwriting approval
·        the credit eligibility is the same as other FHA programs
·        Cash out refinance is are not allowed
·        one time closing
·        rehabilitation funds escrowed by lender and disbursed … (6 comments)

rehab: FHA 203(k) financing – Eligible Properties - 02/25/12 04:22 AM
One of the most underutilized financing programs available is the FHA 203(k) program for home buyers that want to buy homes in less than perfect condition. 
The FHA financing programs have allowed many first-time homebuyers over the last two years to achieve their dream of homeownership with its minimal down payment of 3.5% and low interest rates. 
The FHA 203(k) financing program will include the cost of the repairs into the mortgage financing. The down payment will be calculated based on the acquisition costs plus the cost of the repairs.
To qualify for this program the property must be … (2 comments)