Welcome to the world of Renovation loans • What is a 203k loan? • How can a 203k loan be used? • Advantages of 203k loans • The process of obtaining a 203k loan • Why we are the experts
A 203k is FHA’sRehabilitation Mortgage loanWith this loan, a borrower canpurchase or refinance a homeand include additional money for repairs or renovations.
How can a renovation loan be used? • Purchase or refinance a property •“Modernize” a property • Fix a required repair • Make optional improvements; remodel a kitchen or build a room addition or
Example of Repairs:• Replace Roof • Energy Efficient Improvements• Room Addition • Paint Interior or Exterior• Add a Garage • Landscaping• New Carpet • Handicap Accessibility• Upgrade to Central Heat/Air • Remodel Kitchen/Bath• Repair Termite or Moisture Damage
Types or Properties:• Single family• 2-4 units• Mixed use (commercial and residential in one building)
Advantages:• Perfect solution to Handyman Specials, foreclosure properties, old listing• Close before repairs begin … sellers love this• Only one closing, with money disburse on a draw basis after closing
More Advantages:• Loan amount can go as high as 110% of the “after-improved value”• Up to six months to complete renovations• Buyer can include optional renovations• Can finance up to six months of payments
What is a Streamline 203k? The Streamline K program is for limited repairs requiring relatively little expertise to manage.There is no consultant managing the project. Instead, this program is designed for a “streamlined” project where the home can be occupied immediately after closing, and the contractor will receive a single payment at completion.
Advantages of a Streamline 203k:• Quicker and easier to obtain than a full 203k• Repairs may cost up to $35,000• Requires less documentation than a full 203k• Can save a deal that would otherwise fall through!
Overview of the Process:1. Application 2. Selection of property 3. Estimate of repairs (contractor or Consultant’s estimate) 4. After-improved appraised value 5. Underwriting 6. Closing 7. Repairs begin and money is released on a draw basis
Example of Loan Calculation:Purchase Price $150,000Total Rehabilitation Cost $20,000Total Acquisition Cost $170,000 -Down payment $5,950Maximum FHA Loan Amt. $164,050Monthly Payment * $944* Based on a 30-yr fixed, 203K loan program at 6.00% interest rate and an APR of 6.822% with 2 points as of 06/22/09.
We are the ExpertsWe have trained and dedicated 203kprocessors and underwriters! 203KLoans are all they do! Additionally, onlyCertified Loan Officers can do 203Kloans. We fully understand the 203kloan process, and work to make itsuccessful with every loan.
Thank you for your time today Don’t let loan officers that aren’t 203k experts handle your 203k loans! Call The Expert! Roy J. Hard, Senior Loan Officer Certified 203K Specialist @ 708-829-6081
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