Listing all posts with label 203k loan San Jose. Show all posts.
  1. Why do they need 45-60 days to close a 203k loan? continued...
    ... Donna was curious of course, then I asked her how long does it take to close a standard FHA loan, the 203b? She said 15-21 days, then I told her the naked truth, "you can close a full 203k in the same time it takes you to close a 203b loan. We started her 1st 203k loan and she did everything right. She called the consultant out at the same time she started her loan process. We both headed down the path to the finish line together. [Most lenders will get all of their work done and call us to say "all we need is your report". These lenders will take 45-60 days to close because now all they have to do is call and interurpt us asking "how does it look?  [a total waste of our time to ask that]. 

    It seems so easy for me to understand that if you call me two or three times each day and break my train of thought... forcing me to calculate the possible completion time it is demoralizing to say the least. You are trying to bust your butt to get the job out. a key person on that deal is calling you, you pick up the phone thinking there is something wrong or they might have new input for the job and they say "how is it going?" Maybe some other consultants are much better than me but when I get on a roll and I'm writing that report, this totally blows me out. I then go get a glass of water and try to figure out where I was in the report writing phase. Read what I wrote last and try to complete that sentence. 

    BTW, Donna closed her first full 203k loan in 21 days and called to ask "why does everyone else say 45-60 days to close?". Donna is a shinning star in this business, She lets us start when she does. In all fairness the clock starts ticking once the lender has all of your financial paperwork but we can start the day you apply. HUD designed what we do to take 2 weeks then go to bid. We typically take about a week to achieve a report ready to go to bid. The contractors bidding the job may take several weeks, and that can hold up the process. I had a job the other day and the client met contractor 1 at the jobsite and asked for a bid. The contractor asked him who created his bid, the client indicated it was me, and the response was that he would do it for my bid numbers. He hadn't seen my bid numbers but felt confident that the numbers would be fair and it saved him allot of time. The client asked me for another contractor recommendation though he really liked the first guy. The second contractor came out and did exactly the same thing. If Mike bid the job I'm good with his numbers. 

    The client asked me for another so he is trying to get a bid from the 3rd contractor. This indecision can also slow down the process. We offer contractors a product we call "lost opportunity" bidding which is a great product for a contractor to use as it allows him to hire us when he doesn't have the time to bid a project. We do it for him and save him that time away from his other projects. If you are having issues with getting a contractor to bid your project give us a call.
  2. The FHA 203k is for properties that require some amount of repair. I say some amount as there is no minimum however many lenders have created their minimum. This loan has two facets. Once is for smaller quick fixes that take about 30 days + - to complete and require NO structural repairs. this is called the "Limited 203k" and used to be known as the "Streamlined k".
    Limited 203k: Typically includes repairing broken windows, replacing roofing materials, painting, replacing floor coverings, updated kitchens and bathrooms. NO structural work and repairs must be no more than $35,000 including costs and fees. That means if your lender requires a 10% contingency and $800 in fees you are actually looking about $32,000 as your construction maximum amount. Some lenders require a 20% so you are down to $28,200 for your actual construction limit.
    Standard 203k: This loan has a much higher construction limit. We just did one with a construction budge of $544,000 + 10% contingency. In never fails when I speak at a Real Estate Association when I ask if anyone has ever had a 203k fall apart due to the loan amount for the construction part being too small. I get a bunch of hands come up... then I ask, was the construction about $40,000, and most of them say yes, how did you know?
    This is when I drop the bomb... it wasn't that the FHA 203k program limits were too small but the lender you went to didn't offer the "Standard 203k" and wasn't a team player. They were more interested in keeping the loan in play for them to hell with the buyers desire to buy this particular property. So they told the borrower to find another property. Had any of these deals been with a knowledgable Realtor they could have received their commission sooner, sold that property and not had to go back to the drawing board and seek another property for their client. Who was served by a lender who told them the construction budget was too high... only that lender, not the Realtor, not the Buyer Clent. Are you setting yourself up for a law suit by not knowing what programs might be the best for your client? That is the question you should be asking yourself.
    What could have happened and should have happened if the Realtor had been up to date on this program would have been to find another lender Like Prospect Mortgage who does both type loans. Prospect Mortgage is a full service 203k provider and can do either type loan. They also provide the Fannie Mae version of this product.
    Typical improvements: Structural modifications for updating your home, opening up the walls to create great rooms, etc. Enlarging the kitchen, room additions, garage conversions, adding detached or attached garages, septic system replacement, drilling a new well for drinking water. All these items are possible with the FHA 203k program.
    Unusual uses for the FHA 203k: Fire torn areas like the fires we had in Lake County Fire and the Butte/Amador Fire, as well as the SoCal fire damaged areas. The victims need to know about how this program can help them faster than any other government program. It is actually a sister program to the 203k called the FHA 203h. It is like a 203k on steroids. If you know anyone that was affected by one of these or any other national disaster we can easily get you back on track to getting your home rebuilt. Call is at 707.812.7668 if we can assist you or someone you may know.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  3. Why do they say I can't refinance before 6 months is up?

    You just purchased a home. Now you wish that you would have used a renovation loan as your home isn't quite the way you wanted it but you needed to close the loan quickly, or so everyone told you. Now you can't really enjoy it till you get it fixed up and everyone is now telling you that you need to let this loan mature at least six months before you can refinance. Well, it just isn't true. In fact, it would be to YOUR benefit to refinance immediately with regards to getting the money to fix it up.

    BAH HUMBUG !

    FHA 203k loans have a little known feature for those who need to fix up a property they just purchased and likely should have purchased under the 203k program in the first place. It is simply that you can refi immediately and as long as you close the new loan within six months of the original loan closing YOU get to count all that money you put down as money you have in the new transaction. This is huge because you can 

    This is huge because otherwise you would have to show equity on a home you just purchased and may have to come up with more money to close the new loan. The drawback is that the original lender may loose their commission on the first loan. Not typically an issue if you let them do the new 203k loan. If they don't do the FHA 203k then they just loose their commission. Sometimes $%^* just happens. In many cases they can do the 203k for you and recapture the commission.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  4. Can I build a detached garage with the 203k program?

    Yes, and No
    Yes, you can if there is no other garage on the site. If you do have a garage on site, then the new garage may be considered a luxury item and thus not be allowed.
    If you have a home that just needs a garage to be complete, build one with the FHA 203k, no problem. If you have a two car garage and want to build a new detached garage too, No Can Do. You can build a detached garage if you want to providing there is no living area over or attached to that garage structure.  If there is to bre an in-law unit above the garage or in any way attached to that garage, the new garage must share a wall with the existing structure. In 1994 we were taught that we could attached with breezeway but that is no longer the case. The guideline is being interpreted and misinterpreted to meet the current regime. Why do I say misinterpreted? Simply because they still think "only 5 draw inspections can be financed into the loan" which other lenders interpret means no more than five draws are allowed. 
    That part of the guideline actually states "On a project of $10,000 no more than five draws are allowed". They all quote the last half of that sentence but clearly by any rational person's interpretation on a project of $250,000 in construction maybe there could be a few more.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  5. Create inventory to meet your clients needs.Single story home

    What I love about this business is that we see a different house or two every day and watch it as it transforms to meet the buyer's expectation.

    Yep, that is my Chrysler 300 in the driveway. 

    into a two story home

    This is the "after" scene of the same house. Nice neighborhood but there were no homes in that neighborhood that fit this family's needs. So they added SF to the home to get the home they wanted and in the neighborhood they wanted.

    When inventory gets low this is a viable solution to many home buyers. 

    This can make the difference in an average Realtor and an exceptional Realtor. Providing your client with the home they are looking for, even when it isn't readily available. 

    You have to be looking at your inventory differently than you may have ever looked at it before. This is why I enjoy working with "Rookies" as they aren't "set in their ways" where they can't see the potential. 

    In all cases the work happens after the close of escrow. The Realtor gets paid, and goes to the next buyer. The construction starts and we stay with the buyer to the end of the process. We are happy to copy you on the progress photos if you like so you can stay in tune with the progress and create a portfolio of before and after photos. If you want to do that now to help you get started feel free to request photos for that purpose. We have thousands of archieved photos for you of homes we have completed. 

    REO Realtors, provide us with addresses of your hardest to sell properties and we'll give you some marketing ideas to help you sell those unwanted properties. We can even do manufactured homes with some minor stipulations. Even if they were built prior to 1976? That is the question isn't it?

    POSTED BY

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug
    T
    his is a reprint of my ActiveRain blog post earlier this date 9-8-2015


  6. Contractors typically are used to getting 10% down at the signing of their contract, and another 30% when materials are landed at the sight. That hasn't been the case with a Standard 203k where they must work soley on their own credit and cash to get started then get "reimbursed" for each phase to get their money back.
    The "Limited 203k" loans, per the guiedline always provided 50% of the project cost for materials  up front to the contractor unless you were dealing with a lender like Wells Fargo that only allowed 35% or Prospect Mortgage at 40%. Most other lenders still provide the full 50% per the guideline. Years ago I would see B of A, close the loan and in many cases it took them up to six weeks to provide the "50% up front money". These "limited 203k" project were quite often only going to take 30 days to six weeks to complete. They finally got with the program (years ago) and started providing the money from escrow at closing.

    The new rule as it is proposed for

    Standard 203(k) transactions, Mortgagees may disburse the following at closing:

    • permit fees (the permit must be obtained before work commences [to be reimbursed at closing]);
    • prepaid architectural or engineering fees;
    • prepaid Consultant fees; [reimbursed to the borrower] [This can be added to your escrow instructions to be used as part of their down payment or closing costs too]
    • materials costs for items, prepaid by the Borrower in cash or by the contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date; and
    • up to 50 percent of materials costs for items, not yet paid for by the borrower or contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date
    • For any Disbursements paid to the contractor, the Mortgagee must hold back 10 percent of the draw request in the Contingency Reserve.
    This is actually a big thing. This will allow us to get reimbursed for materials... materials at 50% of their cost at the close of escrow. By paying that directly to the supplier with proper 1099 form and invoice copy for materials they can get the money at close of escrow. This should speed things up considerably for getting the big ticket items deposits paid for up front at the closing. 
    While the permits and some of the other fees has been the case for yers the 50% of some of the materials costs paid at close is going to help allow more contractors the flexibility to do more 203k projects. Technically this goes into effect Sept 14th, 2015 but many lenders are going with it right now.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  7. I need my 203k report in a RUSH!

    I bet you never heard that before, right? NOT

    There isn't a day that goes by that we dont' hear that "comical statement" why is it comical? Because most of the time it wasn't necessary. I just got one a couple days ago where they called me for a RUSH project on Saturday, asked that I rearrange my schedule for Monday but couldn't actually give me the order at that time. Just "could you do it Monday?" Trying to be accomodating I said "sure, we'll figure it out, but you need to place the order". They didn't, of course, but low and behold, I get a call Monday afternoon while having lunch in a nice restaurant asking me to be there in a couple hours. I can't believe the number of people that trivialize what we do and yet it is so important in the process.

    No paperwork prepared yet and no way to prepare it before the inspection. Then they failed to bring my check to the inspection. Funny how that works. 

    What do we do for our money? Create a scope of work, bid the job, and send it out to contractors to bid the project. This rush project was because they waited too long to order the report thinking it was a streamlined k (now called a Limited 203k). People in the business know that 98% of all problem 203k loans is due to the "Limited 203k" program where there is no-one to oversee the project. Had a consultant been brought in early in the process even as a home inspector then there would have been no need to "RUSH" anything. 

    FHA designed the consulting portion of our job to take two weeks, we have spoiled our customers and get them done in about 4-5 days typically and then they want a RUSH... too funny for words. The contractor will take 3-4 weeks many times to do what we do in 4-5 days. Your consultant needs time to do their due dilligence just as you do. When someone asks for a RUSH it is typically because they are poor planners and their lack of planning becomes someone elses RUSH. 

    Once you have a problem call our 203k911.com hotline and we'll help you through it or better yet, call us in the first place once you have an accepted offer and you won't experience the need for a RUSH order. 

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both states of CA, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. 

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  8. My fixer aquisition cost is $850,000 and it needs $250,000 in work

    Just got this call... YES, we can help you.

    Chris Davis at Everbank will guide you through their process. Just click on the link for Chris' web-page. It still has to appraise for the full amount including the renovation or in this example about $1.1 Million or so.

    Last week the question was for a $745,000 sales price and $150,000 in construction. Yes, these are now doable up to $3 Million loan amount. Not the typical LTV of course but Chris will fill you in on their guidelines for this product. 

    We had one a while back that, had it been a single family home would have worked out well for the $1.5 Million purchase and $625,500 renovation project. You can see that this opens up a whole lot more homes for renovations.

    Renovation loans greater than a million $




    Remember the one we did last year for an $888,000 purchase and $150,000, this loan would have been better for the client than the 203k was able to do.

    Now you have renovation financing for those higher end home.



    REO Realtors can move more of those high end foreclosures with this loan product.











    Mike Young, 203k Team Leader  
     
    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process...

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  9. There are "renovation loans like the 203k". The FHA 203k isn't always the best choice for the buyer. Many times the alternatives have better terms or better rates as they are intended for people who have better credit.
    Even if all other things are equal there is no private mortgage insurance (PMI) which saves 0.85% on the initial down payment and many hundreds each month. Yes, I'm afraid you have to have very good credit for the alternative loans but the cost is well worth the effort. This would be the Fannie Mae HomeStyle® Renovation Mortgage.
    It is always a good idea to look at all your options because the obvious solution may not be the best solution. Not all lenders offer all these different products.
    What else is on the horizon? How about the High Balance Renovation Loan product up to $3MM loan amount? This is now available as of today. If you are looking for a home in a high end area you now have a product to help finance the renovation and make the purchase or refinance up to $3,000,000 loan amount. This is fantastic. Call for more information.
    I had to laugh when a client called today and asked if we had anything for his $1.5MM project. Yes,  when we say up to $3 Million in loan amount that would include a whole lot of homes from $625,500 to $3 Million and everything in between. 
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.
    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
    Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug
  10. In 2009 the 203k loan program was out of this world. This time FHA has really stepped up to the plate. Every real estate professional should check the loan limits in your county or the counties you work in. In high cost areas you are back in the business with Jumbo loans that have rehab attached to them... if there is no rehab then FHA may still be your answer with the 203b. With loan limits in excess of $625,500 in 2015 "HIGH COST" areas and similar increases in all areas of the USA, this is the "Hottest Loan Product on the Market". FHA loans are easier to get, allow qualifying faster after a bankruptcy or foreclosure than conventional loans, and have higher loan limits in many cases than the conventional loans that may have dominated the market over the past few years, and the PMI has just been reduced substantially. 

    If you have a specific issue with a project you are putting together talk it out. We have had deals that were expected to fall apart when a client charged Christmas presents just before closing a loan and it threw their ratios out of wack... we were able to use the EEM (Energy Efficient Mortgage) features of the 203k to bring it back in line for closing on schedule. Please don't let a deal fall apart without giving us the opportunity to offer some suggestions that may keep that commission in your pocket. We're on your side.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process...

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


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