Fha 203k Presentation
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Transcript

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