Welcome to Brent's 203k blog. Please contact us if you have an idea for a topic you would like us to cover in a future edition of this blog.
All About Homepath
Fannie Mae has a boatload of foreclosures on the market. These are homes which were foreclosed on the previoius owners, taken posession and now have up for sale. By and large, you can purchase these homes for about 60 cents on the dollar. Allow me to repeat that.... you can purchase these homes for 60 cents on the dollar. Sweet!
HUD 203k Consultants - FHA renovation loans - Read about insider points for 203K consultants - should you use one, what to look out for, what they do. Hud Consultants have been called Fee Inspectors - How much does a HUD Consultant cost? What are their charges? Do I need a HUD Consultant on my FHA 203k?
Click this link to check the Consultants in your State:
https://entp.hud.gov/idapp/html/f17cnsltdata.cfm
A client recently had her offer accepted on a foreclosure and asked me if the house "eligible" for FHA 203K financing.
I hear this question a lot, and it reflects a common misunderstanding. Let me explain...
MOST ANY HOUSE IS ELIGIBLE FOR FHA 203K FINANCING... (so long as you and the property both fit the program guidelines, i.e. owner occupied, 1-4 unit, LTV items, mixed use, etc.)
Even if you have a home that passes an appraisal "as-is," you can STILL use the 203K to freshen it up and make it yours. It is typically not the home that limits eligibility, rather the buyer's circumstance. The key facets are:
* Owner Occupant Only – you must plan to live in the property.
* 3.5% Down payment – you must be prepared to put up 3.5% of the sales price (the minimum statutory investment)
* Meet standard FHA credit-qualifying guidelines – your 203K coach will explain these details.
If you have a home and you would like to either do a MINOR RENOVATION (mold remediation, new kitchen/bath, new carpet or paint, new roof, some windows, etc.) or a MAJOR RECONSTRUCTION (complete gut job, demolition/rebuild), then its all about the loan-to-value (LTV). The FINAL VALUE (post-renovation) cannot exceed the purchase price plus the amount spent on construction by more than 10%. As long as you have the required 110% when the project is finished, more than likely you will be good to go.
Brent Kluge explain helpful hints on how to structure your FHA 203k to position yourself for a refinance where you will drop your mortgage insurance and potentially lower your interest rate when your construction is complete! Please click Like and/or Subscribe!
Feel free to ask a question in the comments section... I will answer! :)
Lots of new clients suffer from the misconception that a 203K loan requires $5,000 for minimum "qualified" repairs... (Hmmm, typical government title that really could be said much simpler). The govy likes to turn everything into an acronym… so lets call these minimum qualified repairs "MQR."
So what is this MQR thing?
The FHA USED TO mandate $5,000 MQR for 203K loans. Under those rules, the house must have needed repairs to bring it up to FHA Minimum Property Standards. All those REQUIRED repairs needed to cost $5,000 at a MINIMUM. You could then add your elective repairs on to this to come to a TOTAL PROJECT COST (within typical 203k limits, of course).
Brent Kluge disclose the REAL WORLD TRUTHS about the Problems & Pain Points with the FHA 203K. We've all heard about FHA 203k Nightmares... here is an insider's look in 203k's, what to avoid, how to protect yourselves and other insights.
A 203K Renovation Loan is an amazing tool in this market. It is the only loan that allows you to buy a house in less-than-perfect condition and finance renovations with a single loan... with only 3.5% in down payment. Not to mention, it allows a homebuyer to spend up to 110% of the renovated house's appraised value – which is a nifty little tool in this market as well...
BUT... can the borrower be his/her own contractor?
Brent Kluge gives honest, reliable and real world advice on the ins and outs of the FHA 203k. In this Video Blog, you will understand if you should hire a HUD Consultant or not. Please click "Like" if you so do and perhaps "Subscribe" if you would like to check back for additional blogs as they are reported. :) http://www.203kworld.com
Federal Housing Administration (FHA) 203K process can be confusing. 
The reason 99% of mortgage lenders don't do them is because they have a LOT of moving parts... Contractors, appraiser conditions, specialty inspectors, underwriters, loan officers, county code, construction principles, engineers, architects, and sometimes Uncle Bob, who has "been in construction all his life." Wheeww! There are a lot of chefs making that soup!
Brent Kluge give amazing hints and helpful information for you when utilizing the FHA 203k Loan and how to find a Contractor. Check back for more info/topics and visit us at www.203kworld.com
Feel free to ask me a question in the comments section about your FHA203k... I WILL ANSWER!
On an FHA 203k Renovation Loan, the money that is set asidefor the construction goes into an "escrow account". These
funds actually sit with the bank until a DRAW REQUEST is properly completed, endorsed and submitted, requesting those funds. How many times have you heard about people WAITING 60,90,EVEN 120 DAYS FOR THE FIRST DRAW CHECK??? Unfortunately, this is happening.
Here is the skinny. MOST 203k's closed in the entire country are closed by two BIG banks. I am not going to say who these banks are directly, though I can tell you they both do Well and both are Banks in America. They do so much volume, their draw departments are inundated with requests and delays happen.
Brent Kluge describes the basics of "How to buy an "As-Is" house". Learn some of the major items of what to look out for when making an offer on the as is home - writing your contract offer - some mortgage options - renovation loans - basic process of the as is home- pointers for you to look for when buying that fixer upper.
Maryland, Washington DC, Virginia, New Jersey, Pennsylvania, Delaware