A prominent Realtor® and sales coach in Denver recently made an appearance on Channel 4 News discussing the terrible shape of most bank owned properties currently on the market. She stated, that in her opinion, inventories are plentiful with bargain homes for sale. Unfortunately, the "Banks" that currently own these homes are not in the business of real estate and do not make the necessary repairs that will "woo" buyers into making an offer on their properties. As a respected Home Stager mentioned over coffee this morning, selling your home in today's market is like being in a "Beauty Pageant" (you want to look your best)…and sad as it is, (bank owned homes) show up like the contestant "in their bathrobe with curlers in their hair"…not impressive (to anyone)!
Right now is a fantastic time to buy real estate in Denver. For one, Denver has never taken a hard hit amongst the economic turmoil. In fact, Denver has been reported to be one of the most stable housing markets in the last two years. What does that say? It says Denver is still a solid place to buy, it says that regardless of nationwide housing declines Denver holds strong.
If buyers are looking to get a great deal on a home purchase they need to be aware that most likely the home is going to be in need of repair. In many situations, Buyers do not have the luxury of additional disposable income to put toward these repairs, especially after paying their down payment and closing cost. This is when the 203K Streamline loan comes in to save the day. FHA released this wonderful product late 2007.
FHA 203K(S) is a loan designed for this market; the 203K Streamline loan allows the buyer to finance what is called a repair escrow. A repair escrow is simply monies put into an account to be spent on repairs to the property being purchased. This allows the buyer to include their "repair costs", in addition to their loan amount, so they do not have any "out of pocket expenses".
Since the debut of this product I have had many clients purchase a foreclosed home sometimes up to 20% below fair market value and they have been able to finance small amounts of money for things like, new carpet, paint, new appliances, plumbing repairs, roof repairs etc. The Buyer is able to get the deal they were looking for, improve the house to their standards without any out-of-pocket expense; while keeping a comfortable monthly mortgage payment.
If you are a buyer looking for a steal in the Denver metro area this product is a perfect fit. Here is a list of the basic guidelines for the 203K Streamline: - Preliminary Guidelines for the FHA 203K Streamline Home Loan
*The 203(k) Streamline Limited Repair Program allows a customer to purchase a home and make limited upgrades/repairs to the property all under one single loan.
The loan is not re-qualified as it is only underwritten one time, upfront. *The FHA 203(k) Streamline Limited Repair Program is underwritten and closed.
On terms that are to be determined “finalized” upon the completion of the repairs. *There is no minimum amount for the repair costs; however the maximum is $35,000
*The borrower is given 3 months from the closing date to complete all the repair/rehab work.
Eligible Properties One-to-Four (single family) residences, including HUD REO properties Manufactured Homes are allowed (must meet FHA guidelines) Spot Approval for Condos is permitted on this program Property must be 100% complete
No partially built homes Eligible Improvements / Work Repair/Replacement of roofs, gutters and downspouts
Repair/Replacement/upgrade of existing HVAC systems
Repair/Replacement/upgrade of plumbing and electrical systems
Repair/Replacement of flooring Minor Remodeling, such as kitchens, which does not involve structural repairs Painting, both exterior and interior Window and door replacements and exterior wall re-siding
Weatherization, including storm windows and doors, insulation, weather stripping, etc.
Septic system and/or well repair or replacement connection to public water or sewage
Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens
Accessibility improvements for persons with disabilities
Repair/Replace/add exterior decks, patios, porches
Basement finishing and remodeling, which does not involve structural repairs
Basement waterproofing, including mold removal system
Written by Kevin Green (Guest Writer)
Sr. Loan Advisor American Liberty Mortgage
Kevin@almortgageinc.com www.almortgageinc.com 303.458.3778 ext: 217 303.433.4904 Fax
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