Your own property is the most valuable asset in your lifetime. It’s not because it’s a big ticket item to purchase that makes it most valuable. Moreover, it is not most valuable because you take years to pay it – not every buyer does. As a matter of fact, it is because it is so valuable an asset that’s why you get the affordable terms.
Think of your core reasons for shelter and security and you will see many ways you have been taking such an asset for granted. Reflect about it; what other big ticket purchase that you get to finance with low down payments. What other asset protects you from the environment, appreciates in value while keeping you comfortable. You can customize it the way you please and in good times – it is more equitable than any bank’s savings account.
According to the Mortgage Reports https://themortgagereports.com/21895/fannie-mae-homestyle-vs-fha-203k-renovation-loan
“In general, the FHA 203K program has more flexible guidelines for the borrower. But, it has stricter guidelines for the property.
For instance, borrowers can have lower FICO scores and higher debt-to-income ratios. FHA loans in general are more lenient than conventional loans in this way. But the property must be a primary residence, and “luxury” improvements cannot be financed.
The conventional HomeStyle® loan, on the other hand, allows you to finance primary, vacation, and rental properties. In turn, it requires higher credit scores and lower debt-to-income ratios.”
Seeing Those Low Priced Properties But Can’t Buy Because They Are Hard To Finance?
“Property is sold as-is and your financiers won’t do it” is what you will hear when you show interest in the low priced houses on the market today. Don’t think that means, that price is not for you if you don’t have 20% of the price as down-payment and another 10% for closing. To the affordable home shopper like you – that does not seem so affordable anymore. Find representatives who are in the know. Don’t despair or give up on your dream for homeownership.
HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
HUD is working to strengthen the housing market to bolster the economy and help buyers like those whom do not have a lot of cash to afford a reasonable priced home and improve it comfortably. One of HUD’s products is the FHA-203K loan program that applies to two levels of any property’s physical needs assessments. Contact us for more information and ask any questions that come to mind. Provide confidential information about your desires.
The loan is for acquiring the property and paying for the reparations and/or improvements so you will have one mortgage repayment schedule. It consolidates a loan for your right to own the property with a loan for improving same property. It is all done up-front during the purchasing process. Like all mortgages it is dependent upon your credit and income qualifications. The benefit is; it makes your housing purchase still affordable because there are two levels to the program’s assessments.
The 203K Standard loan is for the bigger projects which involve structural improvements and expansions such as room additions. The 203k Streamline has a reparation cost not-to-exceed $35,000.00. In today’s prices, you may renew the finishes; modernize your kitchens and bathrooms with new countertops, cabinets, plumbing fixtures, paint etc. You will need some ideas of costs when doing you PNA (Physical Needs Assessments).
So before you hire a contractor to go around with you while you are looking at properties, financing will require a formal procurement process with certified estimations and agreed schedules from HUD’s 203K registered constructors. The 203K mortgage loan is great for any one property that’s 4 units and less. You will need to occupy the property as your primary residence while letting tenants occupy the other available units if there is more than one. The important thing is to work with an agent who can help you find your F.O.C.U.S. so you can weigh all your projected costs. After you have gotten qualified and nailed down your budgets, them at www.203kcontractors.com you can get the best prices from constructor when they compete for your project.
Whether you are borrowing from a participating bank or a qualified mortgage company the underwriting guidelines for you are the same FHA product. There will be two Appraised values to the property. One is for the property in its “as-is” state (before), and the other is the improved value projecting the repairs (after). Your mortgage payments and loan amount will be scheduled from the “after” value. The first is to ensure you are agreeing to a reasonable market value and the latter establishes the value of your hard work.
Once you are preapproved for FHA borrowing, it is not any harder getting for the 203K loan. However the offering price for the property you like must be less than your maximum which is based on your adjusted household income. Sellers and their agents will require you specify that you are using FHA-203K loan financing. Otherwise they tend to ignore your offer. Most sellers want to settle quickly so they will wait for buyers with conventional financing.
When you have your F.O.C.U.S. ©, it will have your list of repairs that are to be done. The repair funds are given in draws and phases. For the smaller 203K Streamline loan, you get two draws and you work directly with the contractor. Naturally with the larger 203K Standard, you get up to 5 progressive funding scheduled and reviewed by a HUD Consultant overseeing the constructors and the lender. So you will be ensured to have the property you desire.
Again the benefits are to get accurate assessments and projected expenditures in line while you are previewing properties. Most contractors do not get involve with shopping for your property. Getting friends to do the work is not a reliable option. It isn’t a good idea because they can’t get the work done ahead of getting paid even though they can “do-it-for-less.” There are qualitative and quantitative differences between contractors and constructors. It’s better to use 203K experienced contractors who can work within the framework of the loan. Friends and relatives used to be allowed to do the work, but it caused nothing but problems so that went away.
Rodwell Building Services work with a compendium of lenders whom does both the 203k Streamline and Standard loan, than select the contractor obtain estimates and turn them in to the lender and it’ll take off from there. When it’s F.O.C.U.S. correctly in the beginning and you have us in your corner, you will acquire the property to your order.
Like us or follow us on Facebook: Next time we will tell you about the Energy Efficiency programs from both US Housing Urban Development and US Department of Energy that will benefit you. Bank of America has bettered the FHA program by offering great interest rate loans with as little as 3.0% down payment. Consequently, the opportunities for owning and affording your solution to your core needs are even better. Subscribe to www.rodwellbuildingservices.com newsletters and blogs to be in-the-know.