1. Understanding the benefits and
process of a Residential Renovation
Loan for Realtors

2. What is a Renovation loan and how does it
work?
Why do you need to know about Renovation
loans?
How will Renovation Loans help you sell more
properties ?

3.  Renovation financing allows a borrower to Purchase or
Refinance a home in less than ideal condition and make
the improvements immediately after closing.
 A Sale may close with some or NONE of the
Utilities/Systems on prior to closing !!
 The cost of the renovation is rolled typically into a 30 year
mortgage making it very affordable.

4.  !1!
When Selling or Listing a property where
the need for repairs is obvious……
When you have an Appraisal with repair
conditions subject
to final inspection, prior to closing.
When you want to sell Vision !
When Selling or Listing a property
where the need for repairs is
obvious……
When you have an Appraisal with
repair conditions subject to final
inspection, prior to closing.
When you want to sell Vision !

5.  Homebuyers: Can purchase homes in less
than ideal condition (as-is) and address the
problems immediately after closing.
 Homeowners: May upgrade/modernize or
expand to increase value ( to stay in or list for
resale)- Love it or List it ! . Equity loans are very
hard to get and credit cards are too expensive.

6.  Real Estate agents: Sell dated and properties
needing repairs by helping potential buyers envisioning
remodeling possibilities. ……….

 Sell a Vision- what it could be, not what it is. Let the
buyer create their Dream Home now.
 Negative Listing notes: REO’s, Short Sales, HUD
properties, “as-is”, cash only, CO responsibility of buyer.
 All can be financed with a Renovation loan easily

 .

7.  Second Home owners and buyers: Can take
advantage of the program.
 Investors can purchase homes in need of
repairs, not limiting them to pay cash (this makes it
possible for you to sell more units to an Investor
freeing up capital to make multiple sales). They can
also upgrade a property they own for increased
rent rolls or to list for resale.

8.  Owner occupants 3.5%-5% down minimum
 Second homes 10% down
 Investors 20% down
 Or for a refinance with similar equity positions after
the home in renovated ( Appraisal is on the after
improved value, not the way it is currently. Make
the property ready for resale at the maximum
price.)

10.  When
After showing listings to buyers that meet their
needs
And you ask them if they like it and would like
to make an offer
You hear “YES BUT “
That’s usually a cosmetic objection you can
overcome using
VISION

11. Vision buys your buyers more!
Would this help you get that property under contract?
$17,500 for countertops, new bathroom, appliances,
flooring etc.
Sales Price is $200,000/ Appraisal is also $200,000
203k uses 110% of Appraisal is $220,000

12. Movement Mortgage loan calculation:
Sales Price of $200,000 plus the Vision of $17,500 ($19,825
total based off the 203k worksheet line B14) =
$219,825.00……just under 10% of the Sales price
We can Lend 96.5% of the $219,825.00 or 96.5% of 110% of
the appraised value $200,000 = $220,000 whichever is less.
Section C’s on the worksheets magic!
So the buyer still gets the $212,131.00 loan, 3.5% down of that
219,825.00 = $7694.00
Buyer needed only $694.00 more down at closing to get
$19,750 of total renovation costs/fees
The Realtor overcomes the cosmetic objection and gets the
offer…The property only has to appraise for the Original
$200,000 in the worst case scenario.
The buyer gets their dream home, a Win-Win for all parties!

14. Comparable Transactions:
Sales Price = $300,000 Vision of $24,000/$29,500 total renovation costs
Sales Price = $400,000 Vision of $32,000/$39,534 total Renovation costs
Sales Price =$500,000 Vision of $40,000/$49,750 total renovation costs
The Vision we quote is what we can promise with no actual increase in the
appraised value above the Sale Price
Actual Renovation can be more as long as we receive an increase in value from
the Appraiser
Thus, by selling Vision within these values you will never lose the Sale unless the
property does not appraise for the Contracted Sales Price, which would be an
issue anyway!.... (Not because you brought up Vision)

15.  Contact Sales Price $200,000.00
 Total Renovation Costs ( Including Contractors Estimate
and all other financed fees such as Contingency reserve,
inspection. Title updates, other fees. Etc..)
$55,000.00
 Total Acquisition Cost $255,000.00
 Loan Amount @ 95% LTV $242,250.00

16.  Borrower contacts a Renovation specialist: loan
options are discussed and preapproval decision is
made.
 FNMA /Conventional vs. FHA/Government. (Possibly
adding the words 203k or Homestyle)
 Contract of Sale is written (Purchase)/using actual sales
price, type of financing and down payment % off of the
Sales price, loan amount is Sales price minus down
payment…They same way you normally write it up…..
No Sweat !

17.  Work write up/estimate –Contractor or HUD
Consultant submits to the Lender. ( 1-2 weeks from
Contact acceptance)
 Appraisal is ordered with the Estimate to Maximize
value (After Improved Value)
 Finalize commitment and clear conditions if any.

18.  Loan closes/funds prior to any work beginning.
 Repairs funds are held in an escrow account and
disbursed base on specific loan guidelines… (usually
after an inspection/up to 5 draws).
 Be sure your borrower deals with a Lender who
administers the draws directly to avoid payment
delays. MM handles and holds all escrowed funds,
available 48 hours post closing !

19. After Home Loan

20.  rBBuyers expect much more today,
 yet most agents haven’t re-tooled or systematized their
buyer processes to deliver that "value-added" service that
buyer’s demand
 Discussing Renovation programs is an “added Value” service.
 Using a Renovation Loan actually adds value ($$$$)
 s
 r that "value-added" service that buy

21.  Attract more potential buyers, those looking for “fixer
uppers” Owner Occupants and First time Investors are out
there, use these products to increase your Sales/Listings.
 Overcome buyers cosmetic objections (Vision) –
 --–
 -------How many hours have you spent driving homebuyer
from listing to listing ?

22.  The perfect Loan Product for properties being sold “AS-
IS”-REO and short sales.
 Realtors are paid when the loan closes, not after
repaired
 Increases your referral base utilizing niche products
(Buyers selling you by word of mouth about immediate
equity (at times) and the newer beautiful home)

23.  When its time to re-list, the property is already
updated
 Wouldn’t be nice to re-List the home in 2020
already updated instead of you having to List a
REALLY outdated listing (Its your headache now)

24.  Helps you sell or list properties that need “TLC”
 Increase your listings (acquire those previously on the
market for an extend period do to improper marketing)
 Market your current listing using proven methods, working
with a Renovation Specialist. (Proactively doing a feasibility
study) * Change the Realtor notes, add “renovation
financing available-Contact Listing Agent” !
 Speak with your Renovation specialist for details

25. • Yard signs (before and after the sale)
• Open house flyers and good faith scenarios,
using the Vision Flyer
• Feasibility studies from consultant (available for
a low fee)
• Take before and after pictures to add to your
Sales portfolio.
• Multiple other flyers and trifolds available

26.  Homes can be knocked down and rebuilt using part
of the existing foundation
 Homes can be raised and renovated to meet new
FEMA requirements
 Homes can be made larger/additions.

27.  Modular homes can be used with the programs
 An existing home can be moved to another lot
 Close loans with current/possible appraisal
conditions (converting them to a Renovation loan
and closing as-is with the same lender !) MM is
your 1 stop shop……. 203b can be closed using the
203k fast an easy if need be when is starts at MM.

28. • Remodeling market totaled nearly $298 Billion in 2012
• Estimated to grow at an annual rate of 3.5% from 2013
to 2015
• Median age of housing stock is currently 35 years
+account
• Homes account for over 22 percent of national energy
usage, and about half of the national housing stock was
build before 1973.
• Median square footage of new homes today is 2,280,
compared to 1,595 for homes built in the 1980s
 Median square footage of new homes today is 2,267, compared to 1,595 for homes built in the 1980s
 Remodeling market totaled nearly $286 Billion in 2009
 Estimated to grow at an annual rate of 3.5% from 2011 to 2015

29. • Trade-up buyers spend 22% more on home
improvements than first time homebuyers
– Income bracket: 80K to 120K
• Expenditures by category:
– Kitchens - $16
– Baths - $11
– Additions/alterations - $28
– Systems - $23
– Replacements - $44
(2012 in Billions) Homes account for over 20 percent of national energy usage, and about half of the national housing stock was build before 1973.
 Median square footage of new homes today is 2,267, compared to 1,595 for homes built in the 1980s

30. • Return based on type of
improvement:
–Bath 64%
–Kitchen 69%
–Master Bedroom 63%
–Basement 70%
–Deck 73%
(National Average)
 Return based on type of improvement:
 Bath 64% Kitchen 69%
 Master Bedroom 63%
 Basement 70%

31. • It is expected that the remodeling
market will grow by roughly 44%
between 2013 and 2015
 It is expected that the remodeling market will grow
by roughly 43% between 2010 and 2015

32. • 1970’s FHA 203k (Full)
– 1990’s Fannie Mae
• HomePath® & HomeStyle®
– 2000’s FHA 203k Streamline
 …..HHistory of the programs
 1970’s FHA 203k
 1990’s Fannie Mae
 HomePath® & HomeStyle®
 2000’s FHA 203k Streamline

33. • FHA 203k Full/Consultant K
• FHA 203k Streamline K
• HomePath® Renovation (Ended 10/6)
• HomeStyle® Renovation

34.  The Full 203k is very similar to the 203k Streamline. There a
 The Full 203k is very similar to the 203k Streamline. There are
only a couple key differences with this loan product.
 e on• Any Structural Repairs. Something as big as jacking up your house
to replace the sill plate falls under the Full 203k. Moving or altering a load
bearing wall. So would knocking the house down to rebuild it, as long as
you leave part of the existing foundation.

 y a cCost. The Streamline is $35,000 MAX (Line B14 on the Maximum
Mortgage Worksheet). If your repairs and renovations go above $35,000
then you need to get into a Full 203k loan.
 HUDHUD Consultant. The Full 203k requires a HUD consultant on the
loan. This person draws up the paperwork and works with you and your
contractors to get a write-up before the appraisal Consultant. The Full 203k requires a HUD consultant on
the loan. This person draws up the paperwork and works with you and your contractors to get a write-up before the appraisal le key differences with this loan product.
 • Structural Repairs. Something as big as jacking up your house to replace the sill plate falls under the Full 203k. So would knocking the house down to rebuild it, as long as you leave the foundation.
 • HUD Consultant. The Full 203k requires a HUD consultant on the loan. This person draws up the paperwork and works with you and your contractors to get a write-up before the appraisal.
 • Cost. The Streamline is $35,000 MAX (Line B14 on the Maximum Mortgage Worksheet). If your repairs and renovations go above $35,000 then you need to get into a Full 203k loan.

35.  • Structural alterations and additions
 • Garage (attached/detached)
 • Remodel kitchen or bathroom
 • Install appliances
 • Changes to eliminate deterioration and
reduce maintenance
 •Modernize…………..plumbing/heating/air
conditioning/electrical systems
 Repair swimming pool (up to $1,500)

36.  • Install or repair roofing/gutters/downspout
 • Install flooring/tile/carpet
 • Energy conservation improvements
 • Major landscaping/decks/fencing
 • Improvements for accessibility
 • Interior and exterior painting
 • Improvements that are a permanent part of
the real estate

37.  New tennis court
 • Gazebo or bathhouse
 • Additions or alterations to provide commercial
use
 • Photo mural
 • Satellite dish
 • New swimming pool
 • Outdoor fireplace/hearth/barbecue pit

38.  WHAT’S THE DIFFERENCE?
 The Streamline (k) program is intended to
facilitate uncomplicated rehabilitation and/or
improvements to a home for which plans,
consultants, engineers and/or architects are
not required. The Streamline (k) program
includes the discretionary improvements and/or
repairs.

39.  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

40.  • Painting, both exterior and interior
 • Weatherization, including storm windows and
doors, insulation, weather stripping, etc.
 • Purchase and installation of appliances,
including free-standing ranges, refrigerators,
washers/ dryers, dishwashers and microwave
ovens after the first $5,000.

41.  • Accessibility improvements for persons with
disabilities
 • Lead based paint stabilization or abatement
of lead-based paint hazards (HUD properties
only)
 • Repair/Replace/Add exterior decks, patios,
porches

42.  • Basement finishing and remodeling, which
does not involve structural repairs
 • Basement waterproofing
 • Window and door replacements and exterior
wall residing
 • Septic system and/or well repair or
replacement

43.  • Major rehabilitation or major remodeling such
as the relocation of a load bearing wall
 • New construction (including room additions)
 • Repair of structural damage
 • Repairs requiring detailed drawings or
architectural exhibits

44.  • Landscaping or similar site amenity
improvements
 • Any repair or improvement requiring a work
schedule longer than six months
 • Rehabilitation activities that require more than
two payments per specialized contractor

45.  Max Loan To Value (LTV)
 • Purchase 95% Owner Occ. (SFR only)
 • Purchase 85% Owner Occ. (2 units)
 • Purchase 75% Owner Occ. (3-4 units)
 • Purchase 90% Second Home (SFR only)
 • Purchase 80% Investor (SFR only)
 • Purchase 90% Second Home (SFR only)
 • Purchase 80% Investor (SFR only)

46.  • The loan amount is based on LTV derived
from lesser of:
 • TOTAL acquisition cost including all
construction related expense
 • Or from the “as completed” value of the home

47.  Minimum Credit Score
 • 660 Owner Occ and 2nd Home
 • 660 (if self-employed)
 • 700 (Investor)

48.  There are no restrictions on the type of
improvements that can be financed; however
all improvements must be fixed to the property
and add value.
 Luxury items are permitted
 New Pool-Deck-Pavers….Vision !

49.  • No minimum renovation amount
 • Maximum: Funds for renovation (including
contingency reserves, soft costs, and payment
reserves) cannot exceed 50% of the estimated
“as completed” value.

50.  mortgage program takes too long to close!
mortgage program takes too long to close!
Renovation Loans are hard to do and
complicated
Not True: It all comes down to the people that are
involved in the process

51. This type of loan takes too long to close
A Renovation loan does have a few more steps
but should take no longer than 30 days to close

52.  https://encrypted-
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53.  This educational presentation was
presented by:
 May Renovation be your Inspiration
 Movement Mortgage

54.  Movement Mortgage, LLC is an Equal Housing Lender. NMLS ID# 39179 (www.nmlsconsumeraccess.org) | 877-314-1499. Movement Mortgage, LLC is
licensed by AK # AK39179, AL # 21022, AR # 105002, AZ # 918544, “CA Department of Business Oversight under the California Residential Mortgage
Lending Act” # 4131054, "CO Regulated by Division of Real Estate", CT # ML-39179, DE # 012644, DC # MLB39179, FL # MLD200, GA # 23002, ID # MBL-
8027, "Illinois Residential Mortgage Licensee" # MB.6760898, IN # 18121, IA # 2013-0023, “Kansas Licensed Mortgage Company” # SL.0026458, KY #
MC85066, LA, MD # 19094, MA Banker & Lender # MC39179, MI # FL0018132, MN # MN-MO-39179, “Mississippi Dept of Banking and Consumer Finance"
# 39179, MO # 13-2096, NV # 3402/3401, “NJ Department of Banking and Insurance", NC # L-142670, ND # MB102519, OK # ML002646, OR # ML-5081, PA
# 34374, SC # MLS-39179, SD # ML.05007, TN # 112748, TX, VA # MC-5112, WA # CL-39179, WV # MB-32019/ML-32020, and WI # 39179. Interest rates and
products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at
closing for all benefits. “Movement Mortgage” is a registered trademark of the Movement Mortgage, LLC, a Delaware limited liability company.841
Seahawk Cir, Virginia Beach, VA 23452.
