The FHA 203(k) program allows borrowers to purchase or refinance a home and include funds for repairs and renovations in the loan. It provides affordable financing options for first-time homebuyers and those with credit issues. Borrowers work with a cost consultant to develop a work plan and budget for repairs, which are done in phases with funds disbursed throughout the process. The program aims to expand homeownership opportunities and increase property sales through affordable home rehabilitation loans.
Camp oamp webinar fha updates thru ml 10-29 sept (2)gingerbell
The document summarizes changes to FHA programs from 2010 and prior. Key points include:
1) HERA in 2008 permanently increased loan limits and banned seller-assisted down payments. Minimum required investment is now 3.5% of value.
2) The ARRA in 2009 temporarily extended higher loan limits until December 2010. Condo requirements were updated, allowing smaller projects and site condos without approval.
3) Starting in 2010, appraiser independence rules prohibit commission-based selections. Validity periods changed to 120 days for all appraisals. Short sales now treated as foreclosures for 3 years.
7 Things You Must Know About 203K Requirement And GuidelinesKendall Matthews
Listen to radio interview http://www.InvestmentRealEstateCorner.com/
Read this 13 page document and you will learn straight from the horses mouth... what does Bill O' Reilly say on his Fox television show "This is the No Spin Zone".... read here the exact 203K guidelines.
The document discusses the requirements for the FHA Pre-Foreclosure Sale (PFS) program and VA Compromise Sale Program (VACSP). Key points include:
1) For FHA PFS, the home must be listed at the appraised value for at least 90 days with a real estate broker. If sold within 90 days, the seller receives a $1000 incentive.
2) Financial hardship must be demonstrated for both programs. For VA loans before 1989, the seller must sign a promissory note.
3) Net sale proceeds must meet minimum thresholds (88% of value for first 30 days for FHA). Closing costs must be reasonable and customary.
4)
The document compares conventional loans and FHA loans. Some key differences include:
- Conventional loans require a minimum 10% down payment while FHA loans require only 3.5% down.
- FHA loans have more flexible credit requirements and allow gifts, unpaid collections up to $5k, and non-occupant co-borrowers.
- Conventional loans have tiered pricing based on credit score while FHA pricing is the same regardless of score.
The document provides an agenda and overview for a Desktop Underwriter training session. It discusses understanding DU recommendations, recent announcements from Fannie Mae, analyzing DU reports, data integrity reminders, and additional training resources. It also outlines general lender requirements when underwriting loans with DU, including employing prudent judgment, ensuring accurate data, complying with verification messages, and reviewing documentation.
The document provides release notes for Desktop Underwriter (DU) Version 9.1, which will be implemented in November 2013. Key changes include retiring the interest-only and 40-year loan options, updating qualifying rate requirements, enhancing DU Refi Plus, and lowering the maximum LTV to 95%. It also provides updates to how DU will identify and handle loans for borrowers with prior foreclosures, deeds-in-lieu, or preforeclosure sales.
The document provides guidance on FHA mortgage eligibility for borrowers who had previously undergone a short sale or short payoff on their home. It states that borrowers are eligible if they were current on their mortgage at the time of the short sale, but ineligible for 3 years if they were in default. Exceptions can be made if the default was due to circumstances beyond the borrower's control. It also allows for refinancing with a short payoff if the borrower is current and there is insufficient equity or reduced income to pay off the existing debt.
Camp oamp webinar fha updates thru ml 10-29 sept (2)gingerbell
The document summarizes changes to FHA programs from 2010 and prior. Key points include:
1) HERA in 2008 permanently increased loan limits and banned seller-assisted down payments. Minimum required investment is now 3.5% of value.
2) The ARRA in 2009 temporarily extended higher loan limits until December 2010. Condo requirements were updated, allowing smaller projects and site condos without approval.
3) Starting in 2010, appraiser independence rules prohibit commission-based selections. Validity periods changed to 120 days for all appraisals. Short sales now treated as foreclosures for 3 years.
7 Things You Must Know About 203K Requirement And GuidelinesKendall Matthews
Listen to radio interview http://www.InvestmentRealEstateCorner.com/
Read this 13 page document and you will learn straight from the horses mouth... what does Bill O' Reilly say on his Fox television show "This is the No Spin Zone".... read here the exact 203K guidelines.
The document discusses the requirements for the FHA Pre-Foreclosure Sale (PFS) program and VA Compromise Sale Program (VACSP). Key points include:
1) For FHA PFS, the home must be listed at the appraised value for at least 90 days with a real estate broker. If sold within 90 days, the seller receives a $1000 incentive.
2) Financial hardship must be demonstrated for both programs. For VA loans before 1989, the seller must sign a promissory note.
3) Net sale proceeds must meet minimum thresholds (88% of value for first 30 days for FHA). Closing costs must be reasonable and customary.
4)
The document compares conventional loans and FHA loans. Some key differences include:
- Conventional loans require a minimum 10% down payment while FHA loans require only 3.5% down.
- FHA loans have more flexible credit requirements and allow gifts, unpaid collections up to $5k, and non-occupant co-borrowers.
- Conventional loans have tiered pricing based on credit score while FHA pricing is the same regardless of score.
The document provides an agenda and overview for a Desktop Underwriter training session. It discusses understanding DU recommendations, recent announcements from Fannie Mae, analyzing DU reports, data integrity reminders, and additional training resources. It also outlines general lender requirements when underwriting loans with DU, including employing prudent judgment, ensuring accurate data, complying with verification messages, and reviewing documentation.
The document provides release notes for Desktop Underwriter (DU) Version 9.1, which will be implemented in November 2013. Key changes include retiring the interest-only and 40-year loan options, updating qualifying rate requirements, enhancing DU Refi Plus, and lowering the maximum LTV to 95%. It also provides updates to how DU will identify and handle loans for borrowers with prior foreclosures, deeds-in-lieu, or preforeclosure sales.
The document provides guidance on FHA mortgage eligibility for borrowers who had previously undergone a short sale or short payoff on their home. It states that borrowers are eligible if they were current on their mortgage at the time of the short sale, but ineligible for 3 years if they were in default. Exceptions can be made if the default was due to circumstances beyond the borrower's control. It also allows for refinancing with a short payoff if the borrower is current and there is insufficient equity or reduced income to pay off the existing debt.
This document provides information about FHA 203(k) financing options for purchasing homes that need repairs or renovations. It discusses when 203(k) financing may be suitable, such as when a home has missing walls, flooring issues, modifications, or items that do not fit properly. It outlines benefits of 203(k) financing like being on equal footing with cash offers and priority for owner occupants. It also defines different property financing types and provides examples of homes purchased using 203(k) financing.
This document provides an agenda and overview for an 8-hour continuing education course for loan originators. The course covers federal lending laws including the TILA/RESPA Integrated Disclosure Rule (TRID) which implements the new Loan Estimate and Closing Disclosure forms. It discusses the requirements for providing the Loan Estimate within 3 days of application, the good faith tolerances for closing costs, requirements for revised disclosures, and timing for delivering the Closing Disclosure. The course also addresses additional federal laws on pre-disclosure fees, consumer intent to proceed, and exceptions to the new TRID rules.
Taking the mystery (and fear) out of FHA 203K Rehab LoansNatlMortgagePro
This document provides an overview of FHA's 203(k) loan program for financing home repairs and rehabilitation. It describes the Streamline and Standard 203(k) options, eligibility requirements, benefits, and general process. The Streamline program allows up to $35,000 for repairs, while the Standard program has no maximum but requires architectural plans and inspections. Borrowers can finance the entire purchase and repair costs into one loan. The document provides guidance on determining loan amounts and outlines the typical steps, from obtaining bids to completing repairs and loan disbursement.
1.a (v8.2) all chenoa fund programs overviewChenoa Fund
This document provides an overview and summary of Chenoa Fund programs offered by CBC Mortgage Agency, including conventional, FHA, and down payment assistance options. Key details summarized include:
1. The training covers Chenoa Fund programs, how to calculate AMI, the loan registration process, underwriting, locking loans, securing down payment assistance approvals, and the purchase clearing process.
2. Chenoa Fund offers 3.5% for down payment and closing cost assistance through second mortgages. Programs are available in all states except New York. First mortgages must be sold to CBC Mortgage Agency.
3. Product options include FHA Rate Advantage, FHA DPA Edge repayable
1.a (v8.3) all chenoa fund programs overviewChenoa Fund
This document provides an overview and summary of Chenoa Fund programs offered by CBC Mortgage Agency, including:
1. Chenoa Fund offers down payment assistance programs in the form of second mortgages for conventional and FHA loans.
2. Eligible property types include single family homes, condos, townhomes, and manufactured homes. Income limits, minimum credit scores, loan terms and forgiveness terms vary by specific program.
3. The document reviews the key details and requirements of specific Chenoa Fund programs, including Rate Advantage, DPA Edge Repayable Second, DPA Edge Soft Second, Conventional Standard 97%, and HomeReady. It also provides a quick comparison matrix of the programs
1.A (8.5) All Chenoa Fund Programs OverviewChenoa Fund
This document provides an overview and summary of Chenoa Fund's DPA programs. It includes:
1. A training series outline covering Chenoa Fund programs, underwriting, locks, documents, and servicing.
2. An overview of Chenoa Fund's general DPA programs including eligible property types, underwriting by the lender, and reimbursement when the first mortgage is sold to CBC Mortgage Agency.
3. Summaries of Chenoa Fund's specific DPA programs including details on eligible borrowers, loan terms, income limits, minimum credit scores, maximum DTI, and other requirements. Programs include Rate Advantage, DPA Edge Repayable Second, DPA Edge Soft Second
A child is celebrating their birthday and when asked how old they are, they respond that they are four years old. Another child then wishes them a happy birthday and when asked their age, says they are three years old.
The new grade reporting process involves logging into the new NCVPS registration system using your Blackboard username and password. Once logged in, you can access reports by clicking the reports button. The reports screen will display available reports with due dates. To enter grades, click the edit button for a report, then the plus sign to expand your course. You will see a list of students to enter grades for. Once submitted, the system will check for errors, and you can resubmit after correcting errors flagged in red or yellow.
Tiffany is having a baby shower on July 7th, 2009 at Jericho Beach. Guests are invited to celebrate Tiffany and help welcome her new baby. The event will take place at Jericho Beach on the specified date.
This document discusses strategies for minimizing protests in public procurement. It defines what a protest is, explains why protests are allowed to provide checks and balances. Common reasons offerors protest are discussed. The document outlines rules procurement officials should follow, such as being fair, communicating effectively, and admitting mistakes. It emphasizes the importance of following procurement rules and procedures to reduce the likelihood of a successful protest.
This document defines common terms used on Twitter, including tweets, tweeps, the Twitterverse, direct messages (DMs), hashtags, replies, tweet-ups, and follow Friday. It also discusses apps that can be used to organize tweets, such as TweetDeck, and apps for posting photos and music links from Twitter, like TwitPic and Blip.fm.
The document discusses the benefits of FHA 203(k) Streamline loans, which allow homeowners to finance the purchase of a property and the cost of repairs or improvements in a single loan. Key benefits include being able to finance between $5,000-$35,000 in repairs, updating older homes, and providing affordable financing for first-time buyers or those with credit issues. The program has guidelines around eligible improvement types like kitchens and bathrooms but excludes luxury items or major additions.
This document provides an agenda and instructions for an online webinar about FHA programs. The webinar will begin at 9:30 am and participants' phones will be muted. Questions can be typed into the chat window. The webinar will cover FHA programs including 203(k) rehabilitation loans, streamlined 203(k) loans, Energy Efficient Mortgages, other repairs programs, and solar and weatherization programs.
This document provides an agenda and instructions for an online webinar about FHA programs. The webinar will begin at 9:30 am and participants' phones will be muted. Questions can be typed into the chat window. The webinar will cover FHA programs including 203(k) rehabilitation loans, streamlined 203(k) loans, Energy Efficient Mortgages, other repairs programs, and solar and weatherization programs.
The document discusses Bank of America's FHA 203(k) renovation lending program. It provides an overview of the program, including that it allows borrowers to finance both the purchase or refinance of a home along with rehabilitation costs in a single loan. It describes eligibility requirements, credit guidelines, types of improvements that qualify, and the application and funding process which involves draw disbursements throughout the construction period.
The document discusses the FHA 203k loan program for home rehabilitation. It outlines the differences between the 203k Streamlined loan and Standard loan, eligibility requirements, timelines, contractor requirements, and disbursement processes. The Streamlined loan has a $35,000 cap and no minimum repair costs, while the Standard loan requires a minimum of $5,000 in repairs. Both loan types can be used to rehabilitate 1-4 unit properties and convert unit types. The Standard loan requires an FHA-approved consultant and repairs cannot exceed 50% of the appraised value.
This document provides information about FHA 203K renovation loans. It summarizes that a 203K loan allows a buyer to finance the purchase and repairs/renovations of a home in a single loan. It can be used for purchases, refinances, and repairs up to the FHA loan limits. There are streamlined 203K loans for up to $35k in repairs and full 203K loans with no repair cost limit but additional requirements. Eligible properties include owner-occupied 1-4 unit homes, condos, and renovations can include most major repairs. The process involves getting contractor bids, an inspection/appraisal after bids, and funds are dispersed during and after completion of the work.
I created this guide to assist Realtors in undertanding the FHA 203(k) home improvement purchase mortgage which allows the buyer to renovate or improve the new home in any way they wish by rolling in the improvement costs right into their FHA purchase mortgage and have the repairs commence and conclude immediately after closing. This program is a true heaven sent and has salvaged a number of dead or dying property deals that came to a halt over property condition negotiations. Many REOs cant or wont pay for improvements! Enter the 203(k)!
The document discusses FHA 203k renovation lending programs. It summarizes the key differences between the Streamlined 203k loan (up to $35,000 for renovations) and the Full 203k loan (over $35,000 for renovations). The Full 203k loan requires an FHA consultant and allows for structural renovations. The document also provides guidelines on borrower eligibility, credit scores, income requirements, appraisals, fees, and the renovation loan process.
This document provides information about FHA 203(k) financing options for purchasing homes that need repairs or renovations. It discusses when 203(k) financing may be suitable, such as when a home has missing walls, flooring issues, modifications, or items that do not fit properly. It outlines benefits of 203(k) financing like being on equal footing with cash offers and priority for owner occupants. It also defines different property financing types and provides examples of homes purchased using 203(k) financing.
This document provides an agenda and overview for an 8-hour continuing education course for loan originators. The course covers federal lending laws including the TILA/RESPA Integrated Disclosure Rule (TRID) which implements the new Loan Estimate and Closing Disclosure forms. It discusses the requirements for providing the Loan Estimate within 3 days of application, the good faith tolerances for closing costs, requirements for revised disclosures, and timing for delivering the Closing Disclosure. The course also addresses additional federal laws on pre-disclosure fees, consumer intent to proceed, and exceptions to the new TRID rules.
Taking the mystery (and fear) out of FHA 203K Rehab LoansNatlMortgagePro
This document provides an overview of FHA's 203(k) loan program for financing home repairs and rehabilitation. It describes the Streamline and Standard 203(k) options, eligibility requirements, benefits, and general process. The Streamline program allows up to $35,000 for repairs, while the Standard program has no maximum but requires architectural plans and inspections. Borrowers can finance the entire purchase and repair costs into one loan. The document provides guidance on determining loan amounts and outlines the typical steps, from obtaining bids to completing repairs and loan disbursement.
1.a (v8.2) all chenoa fund programs overviewChenoa Fund
This document provides an overview and summary of Chenoa Fund programs offered by CBC Mortgage Agency, including conventional, FHA, and down payment assistance options. Key details summarized include:
1. The training covers Chenoa Fund programs, how to calculate AMI, the loan registration process, underwriting, locking loans, securing down payment assistance approvals, and the purchase clearing process.
2. Chenoa Fund offers 3.5% for down payment and closing cost assistance through second mortgages. Programs are available in all states except New York. First mortgages must be sold to CBC Mortgage Agency.
3. Product options include FHA Rate Advantage, FHA DPA Edge repayable
1.a (v8.3) all chenoa fund programs overviewChenoa Fund
This document provides an overview and summary of Chenoa Fund programs offered by CBC Mortgage Agency, including:
1. Chenoa Fund offers down payment assistance programs in the form of second mortgages for conventional and FHA loans.
2. Eligible property types include single family homes, condos, townhomes, and manufactured homes. Income limits, minimum credit scores, loan terms and forgiveness terms vary by specific program.
3. The document reviews the key details and requirements of specific Chenoa Fund programs, including Rate Advantage, DPA Edge Repayable Second, DPA Edge Soft Second, Conventional Standard 97%, and HomeReady. It also provides a quick comparison matrix of the programs
1.A (8.5) All Chenoa Fund Programs OverviewChenoa Fund
This document provides an overview and summary of Chenoa Fund's DPA programs. It includes:
1. A training series outline covering Chenoa Fund programs, underwriting, locks, documents, and servicing.
2. An overview of Chenoa Fund's general DPA programs including eligible property types, underwriting by the lender, and reimbursement when the first mortgage is sold to CBC Mortgage Agency.
3. Summaries of Chenoa Fund's specific DPA programs including details on eligible borrowers, loan terms, income limits, minimum credit scores, maximum DTI, and other requirements. Programs include Rate Advantage, DPA Edge Repayable Second, DPA Edge Soft Second
A child is celebrating their birthday and when asked how old they are, they respond that they are four years old. Another child then wishes them a happy birthday and when asked their age, says they are three years old.
The new grade reporting process involves logging into the new NCVPS registration system using your Blackboard username and password. Once logged in, you can access reports by clicking the reports button. The reports screen will display available reports with due dates. To enter grades, click the edit button for a report, then the plus sign to expand your course. You will see a list of students to enter grades for. Once submitted, the system will check for errors, and you can resubmit after correcting errors flagged in red or yellow.
Tiffany is having a baby shower on July 7th, 2009 at Jericho Beach. Guests are invited to celebrate Tiffany and help welcome her new baby. The event will take place at Jericho Beach on the specified date.
This document discusses strategies for minimizing protests in public procurement. It defines what a protest is, explains why protests are allowed to provide checks and balances. Common reasons offerors protest are discussed. The document outlines rules procurement officials should follow, such as being fair, communicating effectively, and admitting mistakes. It emphasizes the importance of following procurement rules and procedures to reduce the likelihood of a successful protest.
This document defines common terms used on Twitter, including tweets, tweeps, the Twitterverse, direct messages (DMs), hashtags, replies, tweet-ups, and follow Friday. It also discusses apps that can be used to organize tweets, such as TweetDeck, and apps for posting photos and music links from Twitter, like TwitPic and Blip.fm.
The document discusses the benefits of FHA 203(k) Streamline loans, which allow homeowners to finance the purchase of a property and the cost of repairs or improvements in a single loan. Key benefits include being able to finance between $5,000-$35,000 in repairs, updating older homes, and providing affordable financing for first-time buyers or those with credit issues. The program has guidelines around eligible improvement types like kitchens and bathrooms but excludes luxury items or major additions.
This document provides an agenda and instructions for an online webinar about FHA programs. The webinar will begin at 9:30 am and participants' phones will be muted. Questions can be typed into the chat window. The webinar will cover FHA programs including 203(k) rehabilitation loans, streamlined 203(k) loans, Energy Efficient Mortgages, other repairs programs, and solar and weatherization programs.
This document provides an agenda and instructions for an online webinar about FHA programs. The webinar will begin at 9:30 am and participants' phones will be muted. Questions can be typed into the chat window. The webinar will cover FHA programs including 203(k) rehabilitation loans, streamlined 203(k) loans, Energy Efficient Mortgages, other repairs programs, and solar and weatherization programs.
The document discusses Bank of America's FHA 203(k) renovation lending program. It provides an overview of the program, including that it allows borrowers to finance both the purchase or refinance of a home along with rehabilitation costs in a single loan. It describes eligibility requirements, credit guidelines, types of improvements that qualify, and the application and funding process which involves draw disbursements throughout the construction period.
The document discusses the FHA 203k loan program for home rehabilitation. It outlines the differences between the 203k Streamlined loan and Standard loan, eligibility requirements, timelines, contractor requirements, and disbursement processes. The Streamlined loan has a $35,000 cap and no minimum repair costs, while the Standard loan requires a minimum of $5,000 in repairs. Both loan types can be used to rehabilitate 1-4 unit properties and convert unit types. The Standard loan requires an FHA-approved consultant and repairs cannot exceed 50% of the appraised value.
This document provides information about FHA 203K renovation loans. It summarizes that a 203K loan allows a buyer to finance the purchase and repairs/renovations of a home in a single loan. It can be used for purchases, refinances, and repairs up to the FHA loan limits. There are streamlined 203K loans for up to $35k in repairs and full 203K loans with no repair cost limit but additional requirements. Eligible properties include owner-occupied 1-4 unit homes, condos, and renovations can include most major repairs. The process involves getting contractor bids, an inspection/appraisal after bids, and funds are dispersed during and after completion of the work.
I created this guide to assist Realtors in undertanding the FHA 203(k) home improvement purchase mortgage which allows the buyer to renovate or improve the new home in any way they wish by rolling in the improvement costs right into their FHA purchase mortgage and have the repairs commence and conclude immediately after closing. This program is a true heaven sent and has salvaged a number of dead or dying property deals that came to a halt over property condition negotiations. Many REOs cant or wont pay for improvements! Enter the 203(k)!
The document discusses FHA 203k renovation lending programs. It summarizes the key differences between the Streamlined 203k loan (up to $35,000 for renovations) and the Full 203k loan (over $35,000 for renovations). The Full 203k loan requires an FHA consultant and allows for structural renovations. The document also provides guidelines on borrower eligibility, credit scores, income requirements, appraisals, fees, and the renovation loan process.
The document summarizes FHA 203k renovation lending programs. It describes Streamlined 203k loans that allow up to $35,000 for renovations by licensed contractors. Full 203k loans allow over $35,000 and structural work. Full 203k requires a consultant and has multiple draw schedules. Eligible properties include single-family homes, condos, and 2-4 unit properties. The document provides guidelines on loan amounts, borrower credit and income requirements, appraisals, fees, and the renovation loan process.
The document discusses an informational seminar about FHA 203(k) loans presented by Dan Frio of Inlanta Mortgage. 203(k) loans allow borrowers to finance the purchase and repair/renovation costs of a home in a single loan. They can help buyers purchase properties needing work and save time/money by combining financing. The program details eligibility requirements including purchase of primary residences for repair and renovation. It outlines the loan process and provides tips to make it go smoothly, such as using a 203(k) consultant and allowing sufficient time.
- Home Savings of America is a federally chartered savings and loan association that has been in business since 1934 and offers mortgage lending services in 50 states
- They offer conventional, FHA, VA, USDA, and renovation loans with fast 24-48 hour underwriting and low rates
- Specific products mentioned include conforming loans up to $1 million, high balance loans, lender paid mortgage insurance, and FHA Streamline 203(k) renovation loans
- The USDA loan program is also summarized as offering no money down, inclusion of closing costs, and relaxed credit and income guidelines for eligible rural properties
This document outlines HUD's policies regarding:
1) Purchasers must close on property sales within 45 days or forfeit their earnest money deposit, except for certain documented special circumstances for owner-occupants.
2) Investor purchasers forfeit their entire deposit for uninsured sales and 50% for FHA-insured sales if they do not close.
3) Owner-occupants may get deposits back for documented reasons like family death, illness, job loss, or inability to get a mortgage.
4) Extensions may be granted for a fee if documentation shows mortgage approval is imminent.
Affinity Lending Group has been providing home loans since 2003. They offer an FHA Streamline 203K program that combines a first mortgage for both the purchase or refinance of a property along with funding for repairs and renovations. The program allows for up to $35,000 in repairs and renovations to be included in the loan. Eligible properties include 1-4 unit homes and condos that are over 1 year old. Common eligible repairs include roofing, HVAC, plumbing and electrical work. The loan is fully disbursed at closing and repairs must be completed within 6 months.
This document provides an overview of FHA 203k financing and the 203k loan process. It discusses how borrowers can use 203k loans to purchase or repair a home, the roles of various parties in the process, and key considerations and documentation for lenders and consultants. The main stages of the 203k loan and draw process are also summarized, including appraisal, closing, repair work, draw requests, change orders, and final disbursement of funds.
The document summarizes the FHA 203(k) mortgage program which allows homeowners to finance home purchases and repairs in a single loan. It offers affordable terms including low down payments, flexible credit requirements, and fixed-rate terms up to 30 years. The program aims to expand homeownership opportunities and revitalize communities by helping customers affordably finance needed home renovations and repairs. It describes the loan terms, eligibility requirements, rehabilitation works eligible for financing, and draw process for accessing funds during construction.
The document summarizes the FHA 203(k) mortgage program, which allows home buyers to finance both the purchase and renovation/repair costs of a home in a single loan. It describes how buyers can purchase distressed properties and make necessary improvements to expand homeownership opportunities. The program offers affordable financing options for buyers looking to purchase homes needing repairs or existing homeowners financing renovations. It provides guidelines on borrower eligibility, financing terms including loan-to-value ratios, rehabilitation amounts and costs that can be included, and the renovation process including contractor requirements and fund disbursements.
FHA loans have no prepayment penalties or income limits, allow up to 6% seller contributions, and make refinancing easy. Mortgage insurance premiums are now a flat 1.75% upfront for purchases and refinances. Down payments can be as low as 3% from various sources like gifts or cash-out refinances. Credit requirements allow for bankruptcies over 2 years old and foreclosures over 3 years old. Appraisals and inspections focus on health and safety issues only rather than cosmetic problems.
The Heritage Structure Rehabilitation Tax Credit was replaced in 2010 by the Sustainable Communities Tax Credit. The previous credit provided a 20% tax credit for substantial rehabilitation expenditures on certified heritage structures in Maryland over a 24-month period. The credit could be claimed in the year rehabilitation was completed if approved by the Maryland Historical Trust. Certain limitations and provisions applied depending on when the property was certified.
The document provides updates to mortgage insurance and financing guidelines, including:
- PMI is now eligible up to 95% LTV for purchase and rate/term loans with minimum credit scores.
- Minimum credit and documentation requirements have been lowered/removed for various loan programs like FHA and conventional.
- Guidelines for renovation loans through programs like HomeStyle and HomePath renovation have been updated, including renovation cost limits and timelines.
The city council meeting discussed a request from LULAC to fund a $2.2 million rehabilitation of a 49-unit, 40-year-old apartment complex for low-income elderly residents. Staff recommended applying for a Section 108 Loan from HUD, which allows cities to borrow against their CDBG grants, as it offers more favorable terms than other funding options. The loan would be guaranteed by the city and secured by legal documents, with repayments covering the city's obligation to HUD. Council authorization is needed to apply for the Section 108 Loan, which would take 5-7 months to complete if approved.
2. FHA 203 (k)
FHA Rehabilitation Loan 203(k)
With FHA 203(k) mortgage insurance
program, borrowers can purchase or
refinance their home and include the
costs to rehabilitate and repair it in the
same loan.
FHA 203(k) can help you:
Increase sales
Expand your market reach
Help borrowers find affordable
financing and realize the dream of
homeownership
March 22nd 2008
3. FHA 203 (k)
203(k) Streamline
Allows borrowers to easily finance an additional $35,000
into their mortgage to make improvements.
Cover improvements identified by home inspector or FHA
appraiser.
Available for purchase and refinance transactions.
Allowed on limited improvement types, including:-
Roofs, gutters, downspouts heating and air
conditioning
Upgrade/repair plumbing, septic, well, and
electrical systems
Replacement of flooring, windows, doors, siding,
Weatherization, painting, basement waterproofing
Minor remodels that don’t involve structural
Handicapped accessibility improvements
Same guidelines as 203(k)
March 22nd 2008
4. FHA 203 (k)
Opportunity
There are borrowers who:
Are interested in purchasing a property that
needs repairs
Are existing homeowners who need funds to
rehabilitate their property
Want to save time and money by financing
the purchase or refinance with the cost of the
repairs
May not qualify for a conventional loan
Have low-to-moderate incomes
Are first-time homebuyers
Have credit blemishes or low credit scores
Have limited cash for down payment or
closing costs
March 22nd 2008
5. FHA 203 (k)
Program Highlights
L&G handles draws
Up to five releases allowed (two releases
allowed for Streamline)
Work can be completed by contractor or
borrower
Borrower must be qualified and approved
to do the work
Work must be completed within agreed
upon timeframe (no more than six months
after closing)
Contingency reserve required
Up to six months PITI can be included in the
mortgage if the property is not occupied during
construction
Loan is fully assumable to qualified borrowers
with no money down
March 22nd 2008
6. FHA 203 (k)
Program Eligibility
Types of mortgages
30-year fixed-rate mortgage
1-year adjustable-rate mortgage
Optional temporary 2/1 buydown
Purchase and refinance of owner-occupied, primary residence
Attached and detached single family residences, condos, and PUDs
2-4 unit properties
REO properties
Eligible borrowers
U.S. citizens
Permanent and non-permanent resident aliens
Inter vivos revocable trusts
Non-occupant co-borrowers
March 22nd 2008
7. FHA 203 (k)
Eligible Improvements
Virtually any kind of improvement is eligible
provided it becomes a permanent part of the
real property and adds value, for instance:
Additions to the structure
Kitchen or bath remodels
Finished basement or attic
Patios, decks, or terraces
Roofing and landscaping
Safety, energy efficiency, and electrical
upgrades
Handicapped accessibility improvements
Luxury items are not eligible:
Swimming pools, hot tubs, tennis courts,
gazebos, barbecue pits, saunas, or alterations
to support commercial use
March 22nd 2008
8. FHA 203 (k)
Credit
Borrower eligibility determined by HUD - no minimum credit
score required
Bankruptcy (BK) and foreclosure
Chapter 7 allowed after 24 months since the discharge date
and good credit has been reestablished
Less than 24 months (but not less than 12 months) may be
allowed provided the reason for the BK was due to
extenuating circumstances
Chapter 13 allowed after 12 months of the pay-out period
provided performance has been satisfactory and borrower
receives court approval to enter into the mortgage
transaction
Foreclosure or deed-in-lieu allowed after three years
Court ordered judgments and tax liens must be paid
Tax liens may be included in the refinance
March 22nd 2008
9. FHA 203 (k)
Income
Full documentation only
Miscellaneous income is acceptable, including child
support, alimony or maintenance payments, and Note
income
Must show a 12-month history and
evidence that the income will continue for three
years
Self-employed income must be stable
Two-year history required
Rental income acceptable with two-year history
Ratios exceeding benchmarks (31%/43%) may be
acceptable with strong compensating factors (not
acceptable on manual underwrites)
March 22nd 2008
10. FHA 203 (k)
Flexible Down Payment and Source of Funds
Minimum $5,000 rehabilitation amount
3% minimum down payment required
Checking, savings, or other depository accounts
Proceeds from 401(k)
Gift from relative, fiancé/fiancée, or domestic partner
Cash-on-hand
Interest party contributions allowed up to 6%
Cash reserves are not required on 1-2 unit properties
March 22nd 2008
11. FHA 203 (k)
Application Process
Homebuyer locates property and signs a sales contract
(purchase subject to home inspection)
Homebuyer schedules an inspection with a 203(k) cost
consultant to budget the improvements (Cost consultants can
be found on HUD’s website:
https://entp.hud.gov/idapp/html/f17cnsltdata.cfm)
Once budget is approved by borrower, cost consultant
completes the work write-up and prepares contractor bid
packages to obtain cost estimates
Appraiser uses work write-up to determine “as-is” and
“improved value”
Loan closes
Construction begins within 30 days of loan closing
Must be completed in six months or less
March 22nd 2008
12. FHA 203 (k)
Marketing Opportunities
Buyers
Renters
Sellers
List - zero cash down
Existing Homeowners
Refinance existing 1st 2nd Combos with no
equity
Expired listings
Recent Purchases
Older Homes
Newer Homes
March 22nd 2008
13. FHA 203 (k)
Good Neighbor Next Door
Additional benefits for borrowers who
serve their communities
Such as police officers, firefighters, emergency
medical technicians, and school teachers
1-unit, PUDs, and condos
Minimum $100 down payment
Closing and financing costs can be included in
mortgage amount
Borrowers must agree to occupy the property
as a primary residence for three consecutive
years
Designated HUD-owned properties in
revitalization/exception areas are eligible at 50%
off the sales price
March 22nd 2008
14. FHA 203 (k)
Resources
Cost consultants can be found on HUD’s website:
https://entp.hud.gov/idapp/html/f17cnsltdata.cfm
For information on FHA mortgage insurance programs, visit:
http://www.fha.gov/
For information on U.S. Department of Housing and Urban
Development, visit:
https://www.hud.gov/
March 22nd 2008