Fha 203k Presentation


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Fha 203k Presentation

  1. 1. FHA 203K Renovation Loan<br />
  2. 2. WHY 203K<br />Single-close loan to purchase a home that may need repairs<br />Refinance an existing home to remodel<br />Customer can finance the purchase price, or the existing balance, and the cost of improvements into the loan amount<br />Work completed after close<br />
  3. 3. FEATURES<br />Primary Residence 1-4 Units<br />Purchase and rate/term refi<br />Fixed Rate 30 year term<br />Up to six months for the rehabilitation<br />One underwriting review and one closing <br />Same credit underwriting as 203B<br />
  4. 4. FOR BORROWERS WHO<br />Want an alternative to a 2nd mortgage<br />Are looking for a cost effective way to repair or improve their current home<br />Plan to purchase a home with repair contingencies<br />Want to rehab a damaged foreclosure<br />
  5. 5. Types of Properties<br />Owner Occupied Only<br />1-4 Unit Residential (or mixed use)<br />Condos (additional stipulations)<br />Single Family and Townhomes<br />Must be over 1 year old<br />
  6. 6. Types/Differences<br />Streamline 203K<br />Up to $35,000 which must include contingency reserve and supplemental origination fee<br />Actual repairs not over $30,000 to make it work<br />If close to $30,000 may want to use a HUD consultant for inspection<br />Limited on types of repairs, but less documentation <br />HUD consultant not required <br />
  7. 7. Types/Differences<br />Full 203K<br />No limit on repairs – up to HUD area limit<br />Structural work allowed<br />$5,000 minimum in repairs<br />HUD Consultant required<br />Up to 5 draws with inspections at each draw<br />Can include up to 6 mos. PITI if not habitable<br />
  8. 8. Types of Renovations Allowed on Streamline <br />Remodeling Kitchen & Baths (appliances)<br />Lead Base Paint stabilization<br />Repair/replace exterior decks, patios, porches<br />Repair/replace Heating and AC<br />Exterior and Interior Painting<br />Basement Finishing (no structural repairs)<br />Basement waterproofing<br />Replace windows, doors and siding<br />
  9. 9. Types of Renovations Full 203K<br />Structural alterations and reconstruction<br />Install improvements for disabled access<br />Eliminate Health and Safety Issues (mold)<br />Repair swimming pools (up to $1,500)<br />Repair/replace plumbing, install well and/or septic system<br />Enhance accessibility for a disabled person<br />
  10. 10. Types of Renovations Full 203K<br />Minimum of $5,000<br />Structural improvements/changes/additions<br />Add Garage, sun room, deck<br />Repair structural damage<br />Mold Remediation<br />Any repair that might take more than 6 mos.<br />Activities that require more than 2 draws<br />
  11. 11. Real Estate Agents Can<br />Move hard-to-sell listings<br />Offer solutions that generate listing and selling commissions<br />Broaden their market of potential buyers and sellers<br />Make potential buyers envision ways to remodel a property to make it fit their needs <br />
  12. 12. Work Flow – Loan Officer<br />Have borrower complete loan application<br />Collect basic documents for a prequalification<br />Use the excel worksheet to determine an estimated loan amount<br />Use ONLY 203B in Mortgage Data Screen<br />Provide agent and buyer with normal pre-approval letter<br />
  13. 13. Work Flow –203K Dept <br />Contract accepted, pass the file and documents over<br />Proper 203K GFE completed and disclosures printed<br />Application signed with customer<br />Directions provided to customer for contractor bids and process flow<br />Make sure Realtor understands the process<br />
  14. 14. Misc<br />Call me with questions regarding repairs allowed<br />Make sure you have the customers information and they’ve been qualified<br />Give a range of rates – about .5% higher than the standard FHA<br />Currently in the range of 5.25% with 2 points<br />Not able to lock until appraisal is complete and cleared<br />
  15. 15. Misc<br />Appraisal is completed after all bids are in and contractor has provided W-9 and license info<br />Try to use one contractor – better for buyer<br />Self Help allowed on a case by case – must be in that trade<br />