203k nostalgia - investor program - Sacramento to Santa Rosa
During the 1990's there was an investor loan program that had what they called the "escrow commitment procedure" whereby the investor might purchase a property for $200,000, add another $200,000 in repairs, and if it appraised for $600,000 it would get an "escrow commitment" based on the "after improved" value of $600,000 x .965 or $579,000 would be placed in an escrow.
The loan closes and the construction begins just like the owner occupied program. As the work progresses draw payments are paid out for work completed which is still verified by an inspection by the 203k consultant now acting as the lender's draw inspector.
This progresses like this until the work is complete and the home was ready to sell.
What was different is that during the construction phase the investor or their agent markets the property. the unique thing about this loan is not so unique... all FHA loans are assumable, they always have been. Once a buyer is located with the required 3.5% down payment, in this case $21,000, the profits are released to the investor, there was no need for another appraisal, the investor took their money and moved on to the next project.
The agent that found that buyer received a commission for finding the property for the investor in the first place, then listed the property, finding the buyer for the finished home, and received another commission. All with full disclosure and legal.
Don't you wish you could do it again in this market? It would put lots of people back to work. Nostalgia, just nostalgia. 
Then again we also work on homes that start out looking like the one below
look at this large addition where they added on to the rear of the home and added a second story.
Investors can purchase fixers with another program called the FannieMae HomeStyle® Renovation Mortgage.
This is a great way for an investor to leverage their purchases and gain that needed edge on the competition. Instead of doing one project at a time you can now do 3-4 at a time with the same investment.
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