Yeah-the kitchen is something out of a bad dream about the 1970's. And of course the rest of the house is covered in that nasty shag carpeting that was awful even in 1976. You hate to pass this one by-everything else is right about it. As it happens we may have the solution (but you knew we would didn't you?)
Even in this day of extreme regulation on mortgage money, there is still money available for renovation and repairs. May we present the FHA 203K streamline mortgage loan.
A great question to ask. The FHA 203K Streamline loan is a method of purchasing a home and obtaining extra mortgage money to do upgrades and repairs. Many of our clients use this loan in conjunction with the purchase of a bank owned property-bank owned properties being notoriously in need of repairs due to being vacant and not maintained for years at a time. Here are the facts about the 203K streamline:
1) 15 or 30 year fixed rate FHA loan-having all the attributes of a normal FHA loan including 3.5% down payment, fixed rate, upfront mortgage insurance premium and monthly mortgage insurance.
2) Up to $35,000 available which can be added into the loan to make non structural repairs and upgrades to an existing property.
3) The key phrases are cosmetic and non structural repairs. If a roof truss is shot or floor joists are eaten away with termites, this loan won't work.
4) This loan however will repair or replace windows, damaged siding, roof shingles, carpet, paint, trim, kitchen cabinets and bathroom fixtures, appliances, leaky plumbing, furnaces and air conditioning-essentially-anything of a non structural nature in the home.
5) The buyer must have a legitimate contractor who can serve as a general contractor to organize the work. All work is estimated upfront prior to submitting the loan. The contractor must be licensed or registered as an entity by the state. This means that Uncle Bob who does odd jobs on the side is not considered a legitimate contractor.
6) All work is inspected and signed off on by a HUD appraiser. I will mention-this is a highly regulated process that has to be completed within a specific time frame. Essentially if you want the money you have to play by HUD's rules.
7) This loan is for owner occupants only, but can be used to refinance a home and make repairs and upgrades. Many homeowners take out a home equity line of credit or a cash out refinance to pay for upgrades. In the current world of mortgages the maximum loan you can obtain is 85% of the appraised value. So the mortgage, closing costs plus money for upgrades has to be encompassed within the 85%. If one uses the 203K streamline the borrower may be allowed up to 110% of the improved value as determined by the appraiser.
Overall this is not a particularly difficult loan to obtain or administrate. Many buyers are frightened off because there is some homework required prior to submitting the loan application. Homework revolves around determining exactly what the property needs to meet FHA guidelines (an electrical upgrade perhaps?) as well as what the homeowner would like in amenities. In our opinion it is a very legitimate method of bringing a dated home up to current standards.
At Tippecanoe Mortgage we have experience with working with this loan. It is a good way to create equity in a home, plus reuse, repair, and recycle is a positive mindset. There are many great homes that only require a bit of a facelift to be functional again.
So if you want to turn this
blogsvillagevoice.com
Into this
decorepad.com
Don't be afraid to investigate this great renovation loan.
Lava lamp anyone?
www.walmart.com
No comments:
Post a Comment