FHA 203(k) Full Rehab by Venture Development Inc www.ventureloanapp.com 952.285.4319 Everything you ever wanted to know about the FHA 203(k) program

Why 203(k) now? With most markets experiencing lack of 2 nd mortgage funds and the highest rate of foreclosures they have ever seen, and the owners (i.e. banks, lenders, Fannie Mae, FHA, etc) being unwilling to do repairs, offering an option to your client that allows the repairs to be financed AND allows the appraisal to be based off the “after improved” value is a huge selling feature.

With most markets experiencing lack of 2 nd mortgage funds and the highest rate of foreclosures they have ever seen, and the owners (i.e. banks, lenders, Fannie Mae, FHA, etc) being unwilling to do repairs, offering an option to your client that allows the repairs to be financed AND allows the appraisal to be based off the “after improved” value is a huge selling feature.

What is a 203(k) Loan? It is a rehabilitation mortgage loan Allows the borrower to finance the cost of repairs, additions, improvements and renovation into the loan Value is based on the “after improved” structure Depending on the scope of the project, all or a portion of the mortgage payments may be included in the loan amount This is an end loan with monthly payments beginning just like any other end loan – No construction financing and then trying to find a “permanent” loan

It is a rehabilitation mortgage loan

Allows the borrower to finance the cost of repairs, additions, improvements and renovation into the loan

Value is based on the “after improved” structure

Depending on the scope of the project, all or a portion of the mortgage payments may be included in the loan amount

This is an end loan with monthly payments beginning just like any other end loan – No construction financing and then trying to find a “permanent” loan

Benefits of Realtors & 203(k) Financing Stand out among your competitors by having an option for your buyer or seller that they don’t have Beneficial for REO properties in need of repair/renovation Opens the door to more sellers and buyers Find your niche to sell more homes Ability to sell a home that does not meet minimum property standards or City/County code

Stand out among your competitors by having an option for your buyer or seller that they don’t have

Beneficial for REO properties in need of repair/renovation

Opens the door to more sellers and buyers

Find your niche to sell more homes

Ability to sell a home that does not meet minimum property standards or City/County code

Eligible Properties 1-4 family completed for @ least 1 year (Defined as the date the Certificate of Occupancy “COO” was issued) Conversion of a multi-unit dwelling that is decreasing the number of units Conversion of a single family dwelling that is increasing the number of units Complete re-hab (as long as the entire foundation system remains in place) Condos (interior only – no structural work)

1-4 family completed for @ least 1 year

(Defined as the date the Certificate of Occupancy “COO” was issued)

Conversion of a multi-unit dwelling that is decreasing the number of units

Conversion of a single family dwelling that is increasing the number of units

Complete re-hab (as long as the entire foundation system remains in place)

Condos (interior only – no structural work)

Ineligible Properties Homes completed less than 1 year Homes that have never been completed Cooperative units Non-owner occupied properties Non-residential use properties Income producing properties Unique properties

Homes completed less than 1 year

Homes that have never been completed

Cooperative units

Non-owner occupied properties

Non-residential use properties

Income producing properties

Unique properties

Eligible Improvements Additions to current structure Changes for improved functions & modernization (such as remodeling of kitchens & bathrooms) Elimination of health & safety hazards such as lead paint Changes for aesthetic appeal & elimination of obsolescence Replacement or reconditioning of systems (i.e. plumbing, heating, etc.) Connection to public water and/or sewer

Additions to current structure

Changes for improved functions & modernization (such as remodeling of kitchens & bathrooms)

Elimination of health & safety hazards such as lead paint

Changes for aesthetic appeal & elimination of obsolescence

Replacement or reconditioning of systems (i.e. plumbing, heating, etc.)

Connection to public water and/or sewer

Eligible Improvements – Cont’d Flooring, tiling & carpeting Energy improvements Major landscape work (i.e. patios that improve the value equal to the $ spent) Handicap accessible Roofing, gutters, downspouts New appliances

Flooring, tiling & carpeting

Energy improvements

Major landscape work (i.e. patios that improve the value equal to the $ spent)

Handicap accessible

Roofing, gutters, downspouts

New appliances

Ineligible Improvements BBQ Pitts Dumbwaiters Exterior hot tubs Saunas, spas & whirlpool baths Outdoor fireplaces or hearths Swimming pools TV Antenna’s & Satellite dishes Tennis Courts Additions/repairs for commercial use

BBQ Pitts

Dumbwaiters

Exterior hot tubs

Saunas, spas & whirlpool baths

Outdoor fireplaces or hearths

Swimming pools

TV Antenna’s & Satellite dishes

Tennis Courts

Additions/repairs for commercial use

Questions?

Thank you!