For those of you already using our software you should know that we are compatable with "Residential Lending Software" and if your lender asks you to use their software just agree and contact me so we can show you how to make that transistion and continue using the software you love and there is no learning curve.
I had a call from one of our users the other day when a loan officer called him and requested that he use RLS software... it isn't necessary. If you get or if you already have received that call, just call me and I'll put you on the track to get it done.Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Change orders are paid once the work has been completed 100%. You must first approve the work to be completed by change order and some lenders want you, as a consultant, to make that call, others want to do it for you.Then chastise you for not getting the paperwork signed prior to submitting for that approval. You can't. You should authorize the contractor to make the change then once the work has been completed 100% you submit the signed paperwork. There is no "up front" money for change orders.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
We have been selling the best 203k software available for the FHA 203k and HomeStyle® Renovation Mortgage by FannieMae for over 25 years. We have the longest running software available to consultant in the business. All the original competitors have gone by the wayside.
I remember a meeting in DC back in early 1995 as I recall. A competitor on the software came up to me and asked if I was the one with the software and promised to run me out of business.
Another couple of guys asked me if I would consider selling my business in CA, way back then. I asked them, who were they? The informed me that they were doing business in 5 states and had 50 projects going… They did not have a clue till I told them we had over a hundred projects going in one state. I suggested they sell out to me. LOL.
Our software was designed to allow you, as a consultant, the maximum speed to complete the project paperwork, and manage your draw requests.
A few years ago, I was asked to take over a couple of projects where the consultant used another software product. I thought I would just use their scope of work to do the draws. I should have l looked at them more closely. It took them 24 pages to write up the scope… mostly because it takes too much time to walk through 24 pages where most of them are blank or have a bit of info on each page. It took about 45 minutes to do each draw request… I was a bit perturbed. When I got back to the office, I had one of my guys transfer the data to our scope of work pages, it took 3 pages to say the same thing for each of the projects. A draw request should typically take 10-15 minutes at the site. If it takes longer, it may be that additional questions needed to be answered.
In the early days, the draw form had a front page and a back page that required signatures. I had set up a draw request procedure that would keep fraud under control. I went to the project site and met with the contractor, but the borrower was not there. The contractor requested that I leave the paperwork with him and he would get the paperwork signed and return it to me. Well, that did not happen. What did happen is that the contractor changed the amounts on page one of the paperwork where he had signed, then the owner came by and did not inspect anything, instead, he just blindly signed the paperwork. It was then hand delivered to the lender.
If that is not funny enough, the lender then called me with “hey Mr Guru, you failed to sign the draw request.” I had them fax a copy to me, yes, in those days we did use fax machines. When I saw the items were much more than what I had put on the forms, I told them it was not to be paid out, I needed to get with the borrower and contractor to see who, or if both, had committed this fraud.
I recommend to all consultants everywhere that they always sign last, and I see that isn’t being done by all. Had I signed the paperwork it might have gone through as a valid draw request and I would have been an unwilling participant in a fraud.
If you are a consultant and you have been signing the paperwork and sending to your client for their signatures, it is only a matter of time before you will be involved in a fraud. Do yourself a favor and always sign last after everyone else signs the paperwork.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Simply stated, we were one of seven programs evaluated at an underwriters’ conference a few years back... we receive 98% of the vote as "the most popular and complete 203k package in the industry". If that is not enough, we provide the most complete package from the lenders point of view.
Mark Williams turned in his first 203k project to his lender who told him, the packaged would save her 1.5 - 2 hours per project, we love it as it gives the LO the ability to work an additional 1.5 - 2 hours on getting another loan in the pipeline. We have developed a "system" for doing your FHA 203k paperwork. Everything is in modules. Everything is printed to a pdf from the "reports" menu.
To start a project, you merely go to the information page, fill out everything you know then go to the report’s menu, where you choose the upper leftmost report "Initial inspection report" where you save it to make it a pdf. This will provide you with the basis of your "consultation". I would guess that most consultants never "consult" with their clients. They do not know what it means to "consult".
So what does it mean? When we go out to meet with the client, we discuss the paperwork they are expected to read and understand prior to closing. Typically, in the old days, the lender would provide them at the closing and suggest they read and understand them before signing them and then announce the title company closed in ten minutes. LOL, it was not quite that bad, but many were close. We just do it so there is not any question. We also go over the most misunderstood portions.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Draw request form - Seems simple enough on the surface
There are four columns to a draw request. Column 1 is what each category or section has alloted to the completion of those items. Column 2 is everything that has already been paid out in the previous draw inspections. Column 3 is the current request, and column 4 is for the consultant to adjust the draw amounts if he or she doesn't agree with those items in column 3. Typically this would be a downward adjustment.
Contractor creates or fills in a request form, column 3. Then we are called out to do an inspection to see those items were completed in a professional workmanlike manner.
Today was an interesting draw experience. The contractor failed to sign the draw request. I would normally ask them to sign prior to inspecting but this was the forth draw and we just started inspection. We went through all the items and when it came time to sign the contractor refused. I reminded him that this is to get him some cash flow, but he felt it more important to use this as a negotiating tool against the home owner some how. I told them to work it out and let me know when he wants to proceed.
He called me about a half hour later asking me to return to the site for hsi signature or he could meet me. I scanned and emailed the paperwork to him for his signature. Not all turkey's are running loose on the planet.
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Why? That is just not good business. A consultant called today asking to see if we had a way to collect $0.00 hold back with each draw request. That would be against common practice, against common sense, and against the guideline.
If you wanted to accomplish this in our software, you should print the draw request then adjust the numbers on page two to reflect a zero hold back amount. Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Received a call today from one of our software users. He asked if there is a way to tell the program there will be no contingency reserve. Yes, there is. Get into the project you are working on and then go to the "configuration tab" chose [Limited or Streamlined 203k] , save, then go to the MMW tab and chose "0". Once you have done that you will have no contingency reserve . Easy peasy.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Realtors, how would you like to sell every house you sell?
I have told Real Estate Pros for over twenty years that the FHA 203k product should be in everyone's suitcase to be used as needed... BUT WAIT! I've also stated that every home sale should be an FHA 203k or other renovation type loan. They are available up to $3,000,000 loan amount that incudes purchase and renovation.
Now back to the topic, you get a client and take them out to look at a few houses... inventory is low so you don't find anything that fits their needs exactly. Get back to your office and ask the buyers to review each house they saw today... make a list of the things they liked about each one and then what they didn't like about each one.
Now take those lists and see which one has the least amount of changes they would like, explain to them that there is a loan that offers renovation, updating, additions, etc, and that would be the basis of your renovation sale. We can make those changes and hou make that sale right now. Remember that all of these renovation loans closes, you get paid, then the work is started. Your consultant will stay with the project till completion.
In a few years when they are ready to sell and move on, you will likely be listing a larger home in better shape than what you sold them.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
I get such a kick out of seeing new consultants who come on strong with their new software... only to find out they are paying per write up for the use of that software. The minute they fall behind on a montly installment they are out of business.
We believe that when you purchase a software license you should have free use of that software to do as many projects as you like as long as you have that software in service.
There is little more satsifying than helping new consultants get it right. Too bad they had to start off with a "per use" product that is difficult to navigatge. Let us know when you are ready to try a better solution to your 203k write ups.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Standard 203(k) Financeable Repair and Improvement Costs and Fees
The HUD guideline allows a consultant to charge what is common and typical for that service area FOR THAT CONSULTANT.
There seems to be some confusion on this issue as when the so called "new guideline" and that is all it is, a guideline, when it came out it hadn't fully addressed our draw inspection fees. There are several other issues that we'll talk about in the next couple of weeks to help you see some other major flaws in the "new guideline" that just came out too soon, they hadn't taken the time, though they had plenty of time, to complete their work.
The guideline actually states that on going draw inspections can be financed and can be whatever the typical and normal fee is for the area.
All of our fees are published and have been for years. These are our typical and normal fees for all areas throughout the USA where we deliver these services. In an effort to be consistent. Our published fee - click here
Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
This has been misread for long enough - we are not held to only 5 draws
4240.4 REV-2 (5-2.C.) 2) Intermediate draws (four maximum) are inspected by the HUD assigned fee (or DE staff, where applicable) inspector (see paragraph 4-9).
If the cost of rehabilitation exceeds $10,000, then additional draw inspections are authorized provided the lender and borrower agree in writing, and the number of draw inspections are shown on Form HUD 92700, 203(k) Maximum Mortgage Worksheet.
Even HUD is guilty of misinterpretation of this. Now we have lenders who think on large projects there are only 5 draws allowed,
I just received an accounting from a lender who charged $250 x 5 title update fees... they missed this in the guideliine
4240.4 REV-2
(1-13.)
E. Title Update Fee. To protect the validity of the mortgage position from mechanics liens on the property, reasonable fees charged by a title company may be included as an allowable cost of rehabilitation. Where the mortgage position is protected and is not in jeopardy, this fee may not apply. Borrowers may wish to obtain lien protection, but the fees must be paid by the borrower where such lien protection is not required to ensure the validity of the security instrument (see paragraph 1-20). The allowable fee should not exceed $50.00 per draw release. If all draw inspections are not made, monies left in escrow must be applied to reduce the mortgage balance.
Supplimental origination fee - The lenders get this fee and it is a minimum of $350 or 1.5% of the construction cost. They think this fee is for writing 5 checks, and they are willing to take $70 per check, that seems reasonable to me... how about you? But, watch what happens when the project is $500,000 in construction... they get 1.5% and they seem to think it is for writing those same five checks. They don't seem to understand this is to manage the additional draw inspections. Why would it make sense to pay them $1,500 each to write five checks. Of course it doesn't make any sense at all.
ADDED 5/7/2021 - Handbook 4000.1 - So, if you have a loan and the contractor fails to draw enough money with the first five draws leaving a balance in the construction loan... example, say they have $25,000 and they haven't finished the work. Choices are 1) foreclose on the home, no one wants that, 2) authorize another draw, and additional draws as necessary to complete the project... of course. When the guideline says "no more than five draws will be allowed" they mean to say "no more than five draws will be allowed to be financed into the loan." Additional draws may be paid with a change order authorizing funds from the contingency reserve to be used, or the fee can be paid in cash at the time of that draw. Either way is acceptable. I don't, however, recommend, taking a check as I one crooked client provide me with a check which she promptly stopped payment on. Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Yes, permits will be required but when do I need them? You need them prior to any work beginning on the project. When might you start work on your new home? Not till it closes escrow as that is in the paperwork you signed with your consultant. He also instructed you to get them prior to any work to save you a double permit fees fine.
I currently have a lender who is demanding that permits be pulled prior to close of escrow. Interesting? How many of you have ever heard of someone pulling a permit to build on your house that wasn't an owner of your house? This is way out there in left field. The contractor won't pull them becasue they know better so the borrower is being told to pull these against all of us telling them it isn't protocol.
I tell my clients that YOU cannot pull permits until YOU own the property. I don't want you to spend the $10,000 as in this case until you have secured the property. If the deal falls apart at the last minute you will have permits on a house you don't own. Did you ever try getting a refund of permit money that was over paid? NOT going to happen. Some states now actually will allow the buyer to pull permits prior to owning the home as they know they won't refund the money, and they want the money.
They must be liberals because a conservative would say, "close the loan, then, I'll get permits on my house".
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
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.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
This is what we found when the wall was opened. This has been supporting the house in part for nearly sixty years. LOL 2 x 4" studs on 24" centers then you just notch them out as you need to make the plumbing fit.... NOT!
Maybe you might need a notch sometime in the
future, just notch it out and save it till you need it.
This is at a door way where today you would see
a doubled up 2 x 4" stud since it is a doorway.
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
New contruction has always been a challenge for a buyer who wants to build a lot on an in-fill lot, not a tract home. Chances are you don't build a home every day,likely this is the first one you have done in the past ten years ore more. We offer services to clients with "new construction" projects as well as renovation or updating of existing homes, we have found that many of these clients are in need of someone on their side to verify the costs and fees as they are getting their bids to verify they are reasonable for the area. HomeStreet bank is one lender who knows how to get new construction loans closed in CA and I'm sure they can close them in most other states. Our team is all over the USA and can assist you wherever you may be.
We have also partnered with a SIP Builder to off homes built with Structural Insulated Panels. Why on earth would you like to know about these? They don't save allot of money but they do save allot of time. Once you have your blueprints we send them to the factory where they create a set of plans with SIP's. While this is going on your local contractor, trained by the factory to install the SIPs, is busy lining up his crew. Once the plans are available the contractor will submit for permits. Once the permits are issued the foundation can begin. While the foundation is going in and curing the factory is busy building the SIPs for your project. Once they land the SIPs on site it takes about 60-90 days to have your home ready to move into. Just like most other service related business we would rather promise you a 90 day construction from the time the SIPs hit the ground. It takes about two to three days to put up a typical home framing to include the roof. There are a few of these about to go up in the Hayward hills about 4,000 SF but the more common size is like the six we are about to start in Richmond CA about 1,700 SF homes with two car garages.
Once you make the decision to build a home you want to get into it fast, then you may want to look at the SIP way of doing business.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
The best $49.00 you'll spend this year Make more money consulting using the knowledge you already have from your 203k consultant training. Provided you have been trained correctly. This webinar will show you how to take the knowledge you already have consulting and turn it into another profit center. You will see what you have to do to get your inspection fees up under the current "Guideline" restrictions but more than that you will see another way to use your skills to make more money that you ever thought was possible.
... Am I missing something? Why do people ask to get on our schedule before they have an accepted offer on their new home? Well, I provide consultant referrals all over the USA and I can see from some of that contact that leads me to believe that many other consultatns have issues with their scheduleing. If your consultant can't get out to your project within a day or two then you should contact us.
I wonder what they thought I would say? "No, I'm too busy to take on any new jobs this week". That has never been the situation. In the hayday it was not uncommon to do up too four per day, two in the morning and two in the afternoon.
Last Friday a lender called to tell me they had an order coming in and they hoped to get it back by Tuesday... I asked where is it located, and was told they would have the borrower call me. Saturday, came and went, then Sunday, but other lenders called and we scheduled those inspections. Still no word from the Friday lender. Monday morning I see an order come over. Had I known the city it was in, I could have based the rest of my schedule on that knowledge but now I wasn't scheduled in that area and was booked out till Thursday. Turns out the borrower couldn't meet me there till next Saturday.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
What if we don't complete our 203k project on time?
You may need an extension of time to complete the project.
Each construction project has an estimated date of completion set by the consultant or the lender and based on the amount of construction and not to exceed 6 months at the onset. Variables exist that include the current schedule of the contractor at the time of the closing. If the contractor is notified the loan closed and they can start working asap, does't mean they have to drop everything and begin your project.
1) What really happens is that the contractor is notified of the closing,
2) The contractor checks their schedule and decides that they have a project completing in a week or two and that crew will be sent to the new project at that time.
3) Materials procurement then takes place, the contractor starts gathering the items they will need to complete you project. While this is going on the contractor will likely set up a meeting with the borrower's to lay out a plan of attack to get this porject completed asap. The contractor makes more money per hour the faster he gets the project completed. Therefore they will be anxious to get started and to get finished.
All this is happening in the background and the borrower doesn't see very much happening and might be getting anxiety about their project. This shouldn't happen as they have been told what is happening behind the scenes.
Once the project begins construction the contractor is under contract to maintain a crew on the job each day thereafter to insure a speedy conclusion to the project. At no time should the contractor cease work on the project for more than thirty days. I wouldn't let them wait more than a week before you call them and find out what is going on. There must be a draw inspection for work completed each thirty days from the close of escrow.
If we look at this logically the first draw is typically is smaller than the future draws as there is less than thirty days of work. If the project is was originally set up to be completed in 4 months and we get to the 3.5 mark you will need to create and execute an extension request. The extension request should include the following:
A) Reason for the delay
B) Time line with a list of items not yet complete and an estimate of when they think each line item may be completed. This time line should be on the contractor's letterhead and signed by both the contractor and borrower.
C) New estimated completion date.
If your project was originally set up for 6 months you could get up to five months additionally in this manner. Some just take a little longer but it is no one's best interest to drag the completion of a project manager. Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
You can call a plumber to reset this little device and pay about $80 for the service. OR you can reset it yourself with a small screwdriver and a little 1/8 turn. there is a light that is red when tripped and green once you reset it.
Is this device required to be installed on my home in Contra Costa County or Alameda County CA? Click here to see the answer.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
What is the draw inspector's roll on an FHA 203k project?
The consultant has a couple different rolls during the process and it is easy to get them confused and they do get confused all the time. We have to be chosen or at least approved by the lender.
1) As a consultant, we help the client create a scope of work so all of the contractors can bid the same list. It creates less confusion and if the specification is written well enough no one will have any questions.
The more detail, model numbers, etc that the borrower can supply up front the better the project will flow through the completion.
2) Here comes the confusion. Once the project funds and the works begins the consulting is over and complete. Now the roll is as a draw inspector. We are no longer the consultant though we are happy to provide answers through the process, we no longer work for the client, we work for the lender to insure the work is completed in a professional and workmanlike manner.
Many clients believe that the consultant is still the "consultant" and that just isn't so, It doesn't mean we can't answer questions as a consultant and help the client through some of their issues that may crop up from time to time but our roll is to inspect the work that the contractor has requested on each draw inspection. We won't, however call the contractor and criticize them for not doing their job.
What a consultant is NOT -
Clients constantly call us telling us the contractor isn't doing their job. They didn't show up today for work. They haven't had anyone on the job this week. The contractor showed up for an hour today and left and hasn't been back.
All those are valid issues but YOU, the client are the contractor's boss and it is YOU that must call the contractor and let them know what YOU expect.
The guideline indicates the contractor, once started, should have someone present each day working on the project till it is completed. That person may be picking up parts to be used on the project so use some discretion.
When the draw inspection happens it is wise for the borrower and contractor to both be present so everyone can see what the results are and how they were derived. If you have a representative there that representative should NOT be asking questions about items NOT on the draw request. We are there to look at the items requested and nothing more.
We are not there as a quiz, to be be questioned on issues that are between you and your contractor. If that needs to be done then send and email with the issues clearly spelled out and the desired result you are looking to achieve. Then we will see if we can ease the situation for you. Don't surprise us when we think we are doing a draw inspection and arrive to find you and the contractor ready to exhange blows. It just isn't appropriate. Lets get the a resolution long before that.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
Sure you can - but wait a minute 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, on the other hand, you have a two car garage and want to build a new detached garage too, No Can Do. This is a luxury item.
You can build a detached garage if you want to providing there is no other garage and there is no living area over or attached to that new garage structure. If there is to be 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.
Attention Realtors, you have a client and you have found the best house in the world for them but it doesn't have a garage, attached or detached. No problem, it is an FHA 203k loan. Sell them on getting a 203k consultant and having their new loan include the cost of the new garage. Right now that is about $20-30,000 depending on the size. We just finished a two-car detached garage for $28,000 that was over sized to accommodate a small work shop and another that was $20,000 without a garage door. The borrower wanted to get that outside the 203k.
This home fit the client's needs in every other way than the garage. A couple acres, but the built-in garages had been coverted with permits and now they just had a carport under the deck. This actually made the home perfect for this couple who was also a licensed contractor.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
How to make money consulting in spite of the HUD Guideline
That's right. HUD in its infinite wisdom has come out with what was touted as the "new guideline" while in actuality it was not new at all with regards to 203k consultants. In fact it took us back to re-enforce the 1994 fee levels. An outrage for many of us as you can imagine. They don't go a year without an increase in their wages and expect us to go back 21 years for ours.
We have worked hard, building our businesses and when all other fees were deregulated in 2011 we took that as a good thing, though it turns out it was deregulated for all but our fees. Now a compliance inspector can get $450 to make a 2 minute inspection to see if a broken window has been fixed or not but we are expected to take $100 and look at how a home is put together. Is that window properly flashed, sealed, etc, on top of the broken glass repaired. On top of that they now have dumped change orders on us and took it away from the lender… except some lenders want to “okay the CO prior to commencing the work” like they ever did that in the first place. Most didn’t, most rely on us in the field to make that decision for them.
There has been lots of talk on the internet and blogs about how many of you are planning to get out of the business as you can’t possibly do a draw inspection for $100. You are absolutely correct. No one can and make any money at it.
Join us for a 1-hour webinar and we’ll show you what you need to do to make money in this business in-spite of the Guideline. Yea, you gotta pay to see the solution, You will see how you can increase your profits substantially over the consulting work you have been doing provided you have been consulting properly... some of you aren't and weren't. The fee to attend this 1-hour session is only $49 and may run over with Q&A session.
We’ll show you how to take your knowledge as a 203k consultant and turn it into a profit center for your business like you won’t believe till you see it, and no more draw inspections unless you want them.
Learn how to make more money than the HUD Guideline suggests and increase your inspection fees legally in this 1-hour webinar. There is only room for the 1st 100 signing up in this first session, so sign up early. We will have additional events as the demand suggests.
The webinar will show you how to make even more money than HUD pays. I just did one for another client that HUD would pay $1,000 and my fee was $5,500. Doing my second one this coming Saturday where my fee will be $7,500 or close to it. Still based on the construction amount. It is set up for December 28th 2015, 8-9 am PST. This will be the best $49.00 you spend this year and will get your new year off to a running start. Click here to sign up
There is only room for the 1st hundred who sign up, others will have to wait for a future event.
Be sure to send us an email to be notified of the next presentation
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
We just had a lender ask us to increase the contingency based on all these fees that didn't used to be allowed. Interesting that they want to increase their security and though the borrowers quite often want to keep the loan as low as possible, now they are going to have another 10-20% on fees that many lenders demand we get to the penny. Some lenders like M&T even have a form they want us to fill out with the exact amounts of all permits... nice, and impossible to get eactly unless we submit the plans in many cases and we don't have those plans just yet since the client hasn't paid the architect to draw them till they own the house. You have to laugh at some of these things. But this is a new one. Read carefully as it also states it is up to the lender to require a contingency at all or not, so for this one (not M&T) to actually want them higher than they have been is likely just so they make their loan amount a little bigger for their company.
II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward Mortgages 8. Programs and Products - 203(k) Rehabilitation Mortgage Insurance Program
Handbook 4000.1 362 Effective Date: 09/14/2015 | Last Revised: 09/30/2015 *Refer to the online version of SF Handbook 4000.1 for specific sections’ effective dates Limited 203(k) Financeable Contingency Reserves (E)
A Contingency Reserve is not mandated; however, at the Mortgagee’s discretion, a Contingency Reserve account may be established and may be financed. The Contingency Reserve account may not exceed 20 percent of the Financeable Repair and Improvement Costs.
The Borrower may provide their own funds to establish the Contingency Reserves. Where the Borrower has provided their own funds for Contingency Reserves, they must be noted under a separate category in the Repair Escrow Account.
Standard 203(k) Financeable Repair and Improvement Costs and Fees (D)
The following repair and improvement costs and fees may be financed:
· costs of construction, repairs and rehabilitation;
· architectural/engineering professional fees;
· the 203(k) Consultant fee subject to the limits in the 203(k) Consultant Fee Schedule section;
· inspection fees performed during the construction period, provided the fees are reasonable and customary for the area;
· title update fees;
· permits; and
· a Feasibility Study, when necessary to determine if the rehabilitation is feasible.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
There has been allot of uproar since HUD published their "updated guideline" on 14 Sep 2015. Our fees haven't been addressed yet so they have been reinforced as the 1994 guideline which has been in effect since 1994. Outrages as they deregulated all other inspection fees in 2009 or 2011. In fact most of us old timers started charging higher inspection fees with that deregulation.
Consultants all over the USA have been charging from $100 who adheared to the 1994 guideline up to $400 + mileage from a survey we did with existing consultants who do more then one or two per year. The good news is that the local HOC's have been given the authority to adjust our fees to whatever is reasonable and typical for your area but YOU need to communicate with them and I recommend you do it through us. If you have been charging more than $100 per draw, please send me an email and let me know what your reasonable and typical draw fee is at your earliest convenience.
Understand we are not trying to tell you what to charge, we do need to know what you charge so we can make a concerted effort to get control of this fee schedule sooner rather than later. Please email us at Mike@my203kconsultant.com
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
My203k Mobile App is now up on the Google Play Store
We have all been awaiting this day at the Mike Young Team. So glad to see it is ready to fly. I've been using it on about six projects so far and it is really pretty easy to navigate. Mostly centers around checking the boxes that apply to your inspection. Then when you print the report the check boxes are not seen in the finished report, instead it creates a narative report for you ready to turn in with your package.
If you are upselling every project to include a full blown home inspection then you may think twice about this app. Some of you are providing a full blown home inspection and per the guideline giving it away for FREE. You don't need a full blown home inspection for a 203k project, you do however need a quasi home inspection and this one is fast, easy to complete and meets the HUD guideline for what you need to provide FREE as part of your consultant submission to the lender.
I know that some of you aren't doing any type of home inspection with your services but eventually that will catch up with you. You could be removed from the roster for not knowing or not providing all that you should be providing. It isn't just a scope of work that is REQUIRED there is also a home inspection report required and this meets that minimum standard and allot more.
The investment is about 15% of the cost of your next project so it is very affordable.
I've been on the linkedin blogs where many consultants are touting that you don't need 203k software to complete a 203k project... if that were true, I'd still be using my original excel spreadsheet that a number of you are still using. Our software for consultants has won awards for being the most comprehinsive report format available and while there were seven formats at the conference many of them 'excel' spreadsheets we walked away with 98% of the vote as "the most desired format for 203k projects by the underwriters", that is right, so what happened to those wonderful excel spreadsheets and the CN product? They were cast aside. If you are serious about getting your 203k consulting carear off the ground then you not only need our pc software version but this app will actually make the inspection process much smoother and put some profits in your pocket.
Don't settle for just being another 203k consultant, be the best 203k consultant in your area.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Guidline excerp from 4000.1 handbook which became effective on 14 September 2014
Requirements for the location of wells for FHA-insured Properties are located in 24 CFR § 200.926d (f) (3).
The following tables provide the minimum distance required between wells and sources of pollution for Existing Construction: Individual Water Supply System for Minimum Property Requirements for Existing Construction*
1 Property line/10 feet [Must be at least 10 feet inside your property line]
2 Septic tank/50 feet [There must be at least 50 feet between the well and the septic tank]
3 Drain field/100 feet [Leach lines]
4 Septic tank drain field reduced to 75 feet if allowed by local authority [exception]
5 If the subject Property line is adjacent to residential Property then local well distance requirements prevail. If the subject Property is adjacent to non-residential Property or roadway, there needs to be a separation
distance of at least 10 feet from the property line.
* distance requirements of local authority prevail if greater than stated above
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
This isn't about the property or the consultant's job. I'm talking about the RE Agent or Broker that feels they need to control every aspect of the transaction or worse yet, the construction process.
I have a only a handful of people I have had to deal with over the years that want to control everything and it seems like "forever".
Lets review the process again.
1) Buyer finds a home. Agent or Realtor did a great job.
2) Consultant comes on board get report turned in. Consultant did a great job.
3) Loan closes. Loan officer did a great job. Agent was instrumental in the success.
4) Construction starts - Contractor did a great job.
5) Contractor wants to be paid - calls for a draw or progress payment inspection - Consultant (now a draw inspector) did a great job.
6) Consultant (now a draw inspector) turns in the report for payment - Inspector did a great job
Note from step 4 on there is no Realtor or agent. Yet we have them now and then that feel they still need to be in control... NOT. YOU don't, it is not your place to be calling to find out if or when the inspection is scheduled. YOU should be going out and finding another house to sell. I was kind enough and made the mistake recently of notifying the RE Broker of an inspection and it was a harse reminder that I shouldn't have. I informed the agent or Realtor that the inspection would be at 10 am on Tuesday. What do you think happend? I get to the house, the roof is complete, or nearly complete, I need to see which so I get up the ladder and I'm inspecting the roof... my phone rings... huh? Why would the agent or Broker be calling me. They knew I'd be here for the draw inspection. It must be very important for them to be calling me. I'd better answer the call.
"Just wanted to be sure we were all on the same page" was the comment I received. What page did you think I would be on... LOL, I'm on the roof, I don't have the time while I have a contractor and his forman with me to inspect the issues they just want to get paid and NOT waste their time with me taking phone calls. If the borrower had been there, it would have wasted their time as well.
This is not the time to call the inspector. In fact it isn't the Broker's place to call the inspector for any reason other than a new project, and NOT at the time they know you will be conducting a draw inspection. What the agent thought was a good idea was merely a lack of respect for the process, the owner, the contractor and foreman and the inspector. It was a hinderance at best. Don't do it, please. A simple email "how did it go?" would have only wasted the inspector's time. Go sell another house. You aren't in the picture any longer. I know you just want to help, then help by not standing in the way of the process.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
I have been fielding allot of calls regarding the HUD guideline that has been put in place effective 14 Sep 2015. Be careful and read it carefully. Much of it is for case numbers effective March 14th, 2016 that affect us [page 845]. Other parts may affect us sooner. If you haven't had a chance to review them please take the time, there aren't allot of pages that affect us.
The biggest issue is that HUD had twenty-one years to address our wages and see how to take care of the consultants and if we were a private copany they would have been fired. Hell, it appears they have been. There is no commissioner to sign the paperwork. It is odd to me that "Lenders" are covered by the shear fact that they get a % of the construction to write a few checks and keep some records, that would have been a simple thing to do with our pay schedule and should have been much like most of us have done on our own.
When HUD determined that a $100,000 construction budget warranted a 1% fee, they could have easily made it for all above $100,000 too. They didn't that shows a lack of concern for the principle players in this part of the game or incompetence. Take your pick. If they had gone even one year without an increase in their wages they would have shut down the government till they were heard.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Sat in on a seminar yesterday... lets clear the air
I heard another person (consultant) telling clients they get $1250 for a 203k and you can get it all reimbursed in the loan back to the client. This simply NOT true, sorry, but the only fee that is reimburseable per the guideline is the consultation fee and feasibility report, NOT a separate home inspection fee. READ the guideline and you will see that a consulation includes a "203k property inspection". If you charged the client for a home inspection too then you should also provide a full home inspection report of quite a number of pages, if so you can get your full consultation fee. A feasibility cannot or at least should not be charged unless you provide a feasibility report as well and most of the time you do not.
If you charge separately for a full home inspection and deliver one, then you are entitled to be paid for your service but NOT from the 203k escrow, that would be against the guideline. I received a call from a HOC the other day where I was told we cannot sell any ansilary products as it would be a conflict of interest. No termite report, no engineering report, no architectural services, yet we all have been doing all of the above as needed to get the job done faster. I dissagree. I am an engineer or architect, I can be a consultant therefore they are clearly wrong.
Mike Young Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Lender requires consultant to buill for draw inspections
Lenders constantly throw up the guideline when they think they are right... then when they are wrong they still want it their way and they call it an "overlay" and it typically causes delay.
Well as far as us billing for a draw payment, they need to ready ML 94-11
9. REVISION TO THE DRAW REQUEST FORM. Effective for mortgages closed on or after May 1, 1994, the new Form HUD 9746-A in Attachment 3 must be used on all draw requests. The Compliance Inspection
Report (Form HUD 92051) is no longer required to be submitted with the Draw Request form; however, the back side of the draw request form has been revised to include an Inspection Report that must be
completed by the fee or staff inspector on each inspection of the property during the rehabilitation period. The cost of the inspection will also be included on the back side of the form; therefore, the fee inspector
will no longer need to bill the lender for the inspection fee. The inspection report must be completed for the fee to be paid by the lender.
It appears since 1994 it hasn't been required for us to bill this separately.
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 + but no more than 60 days to complete - 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 Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Wo told you that you can't refinance until you hold the property for 6 months?
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 Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. It really doesn't matter as we have associate offices in most every state in the USA. Find a consulant anywhere in the country.
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
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
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
Posted by Mike Young on September 29, 2015 at 2:01 PM under
• 0 comments
Question: I am going out tomorrow to a house with a free standing wood burning stove as the only heat source. They are doing a HomeStyle loan. Does the home need a central heat source, or is the wood stove OK?
Answer: Several years ago I had an FHA 203k project in Oakley that involved a home built in about 1830 that had a Ben Franklin type stove as the only source of heat. The borrower's didn't want to put in a forced air system but wanted to keep the flavor of this "historical landmark" home. I contacted Lee Bartok at HUD engineering in SF and he indicated that HUD would have no problem with it provided the county or city inspection department didn't. We were able to keep the stove as the only heat source for the home.
Your quesiton is a bit difference as you are doing a HomeStyle® Renovation Mortgage which is Fannie Mae's version of the renovation loan. The key is that Fannie Mae does adhere to the HUD MPS (Minimum Property Standards). The MPS as I recall suggest the heating source must be sufficient to heat the home to 70 degrees at 36" from the floor and have a thermostatic control. That being said I would check with the local jurisdiction, call it out in your report as not meeting the requirements and the reasons you feel mitigate that if the city or county inspection department doesn't have any issues. If they do then all bets are off. I have been able to get pellet stoves approved since they do have thermostat control. The 203b guideline suggests it as low as 50 degrees in all rooms.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
We need to get the word out as fast as possible. With over 1,888 homes damaged in the fire we need to get the word out fast BEFORE the foundations are removed. We need those foundations to best serve the community.
I lost a business, a 5,000 SF brick warehouse full of stuff I had took 45 years to accumulate, to a tornado about 10 years ago in NC, it took everything we had stored in the warehouse, everything, there wasn't anything we could salvage, what wasn't destroyed in the tornado was runied after sitting in the rain for three days before the fire department could render the walls safe for us to return and see what could be saved. What wasn't blown away was now so covered with mold it was a 100% loss. The catestrophic loss is demoralizing at a minimum.
In this case and due to what we learned in the devastation left by Hurricane Katrina it is important that we move very fast to help those who want it.
DO NOT LET THE CITIES OR COUNTIES COME IN WITH BULDOSERS AND CLEAR THE LAND, THIS WOULD CUT OUT A NUMBER OF GREAT OPTIONS FOR THE OWNERS OF THOSE PROPERTIES. KEEP THE FOUNDATIONS !
If we save the original foundation, or most of it, we can likely use the FHA 203k and HomeStyle Renovation Mortgages to rebuild the homes. We prefer the entire foundation but it is important NOT to remove the debris by scraping the ground that would take out the foundations. These are 203k projects, every one of them. MY Team is willing to do that initial look for FREE to see if we can use that foundation or not.
The photo in this post is a home that has looked like this for over 15 years. It was fire gutted and still remains to this day a blight on the eyes of the community. This is NOT what we want for our latest fire victims. Lets get it fixed ASAP.
If this area is going to be declared or has been declared a disaster area which it is (from what I'm reading it appears this has already been accomplished), we can employ the 203h which is a 203k on steroids, very fast to close.
We can help get these people back in business and back into their homes. Don't wait for the government to do it, Katrina is a great example of what happens if you wait for the government to fix something. New Orleans residential homes are still sitting there waiting for the government to do something. The help isn't coming. YOU can't wait till the government reacts, it just isn't going to happen. Hurricane Sandy devastation still has thousands of homes that haven't and won't likely be rebuilt anytime soon. The photo op was just that, a photo op. We are all about action and no photo ops are required or desired. Lets just get in there and get this done.
Like anything else it is first come first served. Who, in that area, can get us a place to hold a town hall meeting and explain how these homes can be rebuilt quickly and efficiently.
There will be many who will take the insurance money, and move to another area to start over... THOSE people could donate their land to the person who wants to rebuild it so they can write them off once the insurance company has paid them off or sell them for the taxes they may owe and with the foundations we can rebuild them. This process will allow more affordable housing for those who may want to rebuild here. DON'T just walk away and wait for the foreclosure process as that will keep the area from recovering for a number of additional and unnecessary years.
Others will use these programs to rebuild their homes and keep the cash from the insurance company in their bank thus being better off than they were before. Yes they will have a mortgage but they will have a mortgage on a brand new home and have money in their savings account too. Maybe use part of that money to keep their mortgage payment where they want it. Others will rebuild and own their homes free and clear. There are so many options. Just keep the foundations to open up many more options. Remember our maximum loan limit for renovation loans is $3,000,000, NOT $35,000 as some may have you believe. Our team is ready to assist. Our Team is ready to provide an initial FREE visit to your property and go over your options. NO Obligation whatsoever.
I'm getting lots of calls about how HUD can shove it and it has lots of consultants in a tizzy. STOP, please stop, let the dust settle a little bit. I was talking to a HUD official in DC the other day and was assured that thing are on the commissioners desk for signatures that changes all that we are reading with regards to our future fees.
In any case our fees are not determined by HUD, they are determined by each and every one of us as individuals. If you want to charge off the guideline and get 1994 pricing go for it. It isn't any more than an amount that HUD has determined is the maximum that they are willing to include in the loan amount. Yes it is grossly out dated and no, it doesn't come close to reality.
If these prices go into effect there will be so many areas where the public can no longer be served by this progam and that isn't typically HUD's idea of public service on their programs. Just "chill" for a bit and lets give my DC contacts some consideration and then, if it was a lie, the court system will be the next likely step.
Any lender that tells you what to charge is setting themselves up for a rude awakening. They have been trying to control our fees for at least twenty years that I know of and this rude awakening is likely the next step. If you want to be part of the cure, then get out your check book and be ready to spend a hundred bucks when that time comes. If we all do that, we will not only show unity but we will also so them we can no longer be pushed around.
This is only HUD and not Fannie Mae so all isn't lost. If you want to be part of an even larger loan program that works like the 203k with limits up to $3 Million let me know and join the Mike Young Team of consultants nationally.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
I hear people asking me all the time "why should we use a 203k or HomeStyle Renovation Mortgage over a standard construction loan? I received an email today and this is what it had for their construction loan
RATES AND FEES
7 to 14% to Borrower
Servicing Fee: 1%
Broker Points: Starts at 3.0
Referral Fees: 2 Points Maximum
Look at that high interest rate versus the FHA and FNMA products which are currently between 4-4.5% typically. Servicing fee, what is that? How about the Broker points which quite often are "ZERO" with FHA. Plus 2 points referral fee. That in a nutshell is 7-14% interest for the borrower and 6 points up front. Not even close for our "borrower friendly" loans. If you are an investor,you should use the HomeStyle Renovation Mortgage and get a 30-year fixed rate that you are not under the gun to refinance while you look for your buyer to clear you out.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
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.
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?
The new HUD Guideline comes out shortly. On 9-14-2015 the new Guideline comes out. This is NOT a reflection on the prices a consultant can charge for their services. HUD doesn't restrict what we can charge, only an amount they are willing to take on as a risk to the loan at this juncture. Whatever they come out with on the 14th of September doesn't reflect a mandatory fee, only an amount that can be underwritten into their loan.
If the loan is for a total amount of $350,000 they can only stand to add $XXX to that and make sense in their model for insuring that loan. That merely means we have to pick all of our fee up front at the time of the inspection and only $XXX will be included in the loan amount. This is actually reasonable for them to do. We need to select a representative down the road to represent us. A level headed person who has "negotiating" ability. NOT someone who merely whines about our fees being too low. That isn't and hasn't been the right arguement ever. We can't win that arguement once you realize there is more to them increasing our fees than just pleasing us.
Each of us has to determine what a "resonable fee" is for our work and realize that HUD is only telling us the part or portion of our fee that they are willing to underwrite and add to the loan for a 203k. I hope that is understandable as it actually does make some sense. Don't let any lender tell us what to charge that would open them up to a class action suit from us IF WE GET AND STAY ORGANIZED.
There may be some lenders or home owners that look at the guideline and think this is all we can charge, that is false. It is all that can be underwritten into the loan.
I hear allot about the "limited 203k" loans falling appart as they require more money than the $35,000 cap. There are other potential solutions for the home owner.
I was reading a blog post on another site where a young man was discussing purchasing a triplex that he planned to live in and another purchasing a four-plex to live in one of the units. This is all good but then they talked about the "limited 203k" loan as being their best shot.
Look at this scenario - purchase with the Limited 203k and go for the $35,000 (acutally $34,200) including contingency if your lender requires a contingency and many do. Now you only fix the minimum repairs that get you in control of the property. Once you are in control of the property get a Title I loan. Title I loans are also fixer loans. You get all the money up front and have six months to complete the work. How much can you get under this program? $12,000 per unit or another $36,000 less costs and fees for the triplex or $48,000 for the four unit property. For a single family home you can get up to $25,000, but two units would only get up to $24,000.
Remember that you already did some of the work so this new work MUST be disctictly different work and this loan is typically a shorter term of 20 years but in all cases it must be shorter than the remaining mortgage on the first loan. Yes, this is a second loan.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
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
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
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
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
Posted by Mike Young on May 28, 2015 at 2:37 PM under
• 0 comments
When does it make sense to refi before 6 months is up?
You just purchased a home, it 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.
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 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 $%^* happens.
Not to worry however as they will make it back with the refi into the 203k if you stay with them. Be weary when you are told you CAN'T refi before the six month mark as this isn't because YOU can't it is because they loose their commission. Let them know what you are thinking and you should be okay provided they do the FHA 203k standard or full program.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
That is a great question as many, and I mean many, lenders get it confused with a consultation. Or worse yet the second half of a consultation.
Let's start with the order. A lender typically calls in with an order for a feasibility report. This product is a quick trip to the site, no more than thirty minutes on the site for a SFR and a report that is generated about an hour after we return to the office. This report is a thumbnail sketch of the work to be completed to bring the home to the FHA Minimum Property Standards. Nothing more. Not enough for a contractor to use to create a bid. This is a tool to help determine the condition of the property with regards to the Minimum Property Standards that includes health and safety issues as well as most, if not all, structural issues.
Where the break down occurs is when the lender calls everything a "feasibility report" and actually is ordering the "consultant report". The consultant report requires a much more extensive inspection of the property and a detailed scope of work, sometimes referred to as the SOR (Scope of Renovation). This report should be detailed enough for the contractor to make a bid short the final working drawings.
There may be adjustments after the final working drawings are provided, if they are necessary at all.
In one case we are asked to take a single story home about this same age with a front porch all the way across the front and create something that looks like this photo - to do this right we would need working drawings that might take a few weeks to get drawn up.
In most cases the lender and borrower wants to close the loan about the same time that these plans might be ready to look at. Is it feasible? Yes, if the cost isn't prohibitive. Shall we order a "feasibility report" or do you want to close this loan fast and order the consultation?
I recommend ordering the "consultation" and this will move the project fast forward to a close. What we do is meet with the client at the site. We already know their budget figure. If it appears they are way off the mark we flip it to a "feasibility" provide a report the borrower can actually use to renegotiate the purchase price. Then, if they are successful we go back out and do the "consultation" with the new parameters.
I see many lenders calling us out for a feasibility report when they are trying to close fast. That isn't going to do it. However they may actually mean to call us out for a 'consultation'. They each have their place so you really need to know the differences.
Now and again you get a consultant that decides "why should I pay for training", "I can figure this out all by myself".
1) HUD says you are supposed to have training - reason #1
2) HUD says it should be at least a 15 hour course - reason #2
3) You have a learning curve that training will shorten and correct your misconceptions. Yahoo
4) Anyone who tries to reinvent the wheel thinking they are going to save money on their training is an idiot. The training is just that, "training" so you don't screw up the first time you do one.
Just got off the phone where a new consultant just quoted $150 + mileage for a full consultation. That isn't going to happen. We consultants haven't had a raise since 1994 It might actually be a "trip fee" but in the end there will most likely be a full $600 fee plus mileage on top of the $150 already charged. It is so sad when this "bait and switch" mentality raises it's ugly head.
I had one a couple years ago that I had quoted right off the HUD guideline at $800 versus another consultant who charged $350. The borrower was really angry that I didn't tell her that his $350 was a trip charge on top of her $800. Of course, I had no way of knowing this in advance but she thought she was going to save money and in the long term she ended up paying $350 more than she would have had she used our services.
This happens in about 50-75% of the time with new consultants that don't know the ropes and are just trying to figure out how to make money with 1994 pricing. I think it is a terrible way to do business and we will continue to provide our fee schedule openly and not "Hide costs" to be billed later.
Can you repair a foundation with the FHA 203k program?
Yes, of course. this home had a basement but no perimeter foundation
The photo to the left is day one, our initial inspection. The home has no perimeter foundation but it does have a small basement. Note the front
entry door right in the middle of the front of
the home yet no walk from the street to the
front porch. Everyone enters this home by going up the driveway and entering from the rear.
The photo to the right is after the weigth was taken off the home to allow the foundation to be installed.
This is the home after it was set back
down on it's new foundation. The front
entry door is no longer in the front
the front porch has been removed and
the handrail has been extended to close
that opening. The new ownder created
this to match the existing handrail.
The rear of the home as it was at the time of my inspection.
The scene to the right shows the rear of the home with the little bump out that had a low ceiling now removed and a new rear covered porch installed all the way across the rear of the home and you can see the new foundation.
Notice you can see under the home in the left photo.
The result after the rear porch was complete and handrail installed. The home now has
some character and is likely worth a whole lot more than the original home.
Some of our clients just seem to have a knack for creating value with their improvements. In this case they did a wonderful job of restoring an old home and updating it. They took out some walls at the interior and reconfigured the home to make it so much more functional than the old farm house had been.
Oh, you want to see what some of the interior looks like? Okay, here are a few interior scenes.
That is just what it means to be a 203k consultant or renovation/remodel consultant. Most people don't remodel their home very often and guess who knows it? That is correct, the contractors know it and quite often they capitalize on it.
The task was to add a second story to this home and change from a "bungalow style" home to a 2-story "craftsman style" home with a budget of $150,000, well, it couldn't be done but I felt it could be done for $159,000 plus contingency and the borrower agreed that it was still doable so we moved forward.
It is my job to create a scope of work and give you a bid on what I think a contractor should be charging for this specific SOR (scope of renovation) as so many lenders call it. If your consultant isn't bidding on this project before you solicit bids from the contractor(s) then your consultant ISN'T doing their job and you are not getting all of the service you are paying for.
Next step is for us to print out the SOR without prices in it and give it to the borrower to use to solicit bids. We don't like to let this out of our control so we send it to the borrower's contractor selection with a copy to the borrower so they can see our comments to the contractor and that way we maintain control so the lender can close the loan quickly.
Once we have a "confirmed bid" from a contractor so our bid is "validated" the appraisal is typically ordered. Many will order the appraisal with our bid paperwork as the scope of work doesn't change, only the price may change slightly.
Now the bids come in. In this example the borrower had a contractor but she made a crucial mistake, she let the contractor know that she was so excited to have them working on her project to take this bungalow home and turn it into a "craftsman" style home. Her contractor bid the job at $298,000 versus my bid of $159,000. Yikes! What do we do now?
That is easy. We sent it out to another contractor that neither of us had any experience with, no preconceived notions. The second bid came in at $161,000. Just 1/2% higher than my original bid.
Conclusion: Rest assured we have your back. When the contractor's know that they will typically bid a bit tighter in the first place.
This has become more and more important for you since our purchase or refinance and renovation loan limits have climbed to $3,000,000. There are lots of homes in our area that qualify for these higher loan amounts. We had three last week that were purchases at nearly a million dollars plus the renovation money which is well over the FHA and FannieMae loan limits. Not a problem, we have you covered.
Mike Young, 203k Team Leader
We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. This post is for our St Lucie County office. 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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process...
My 203k consultant isn't doing a good job of managing the contractor!
Well, I don't know how to put this any other way but "it isn't the consultant's job to manage the contractor" so he or she shouldn't be expected to do that.
1) The consultant is a consultant when first hired. They will consult with you and help you develop a plan to renovate the property. A "scope of work" or "scope of renovation" so that every contractor you might have bid this job does so with the same list of items to complete.
2) Secondly the consultant can assist you in finding a lender or a contractor if you haven't found one. We typically know who can close these loans fast and who only talks a good talk. We can give you our "do not use" list of contractors but only in the event you have chosen one of them. Some contractors, a very short list, don't have a clue about contracting but have had the ability to pass the test and get their license.
3) The consultant can assist you in choosing a contractor from the bids that have come in on the project. The lowest bid may not be the best bid. We had one not too long ago where we bid the job at $82,000 and the first contractor bid over $100,000 and the second bid at $67,000. Of course the owner felt they wanted the $67,000 bid. That is fine but we asked the lender to fund the $82,000 as it was pretty clear to me that they forgot something or made an error and we are not here to bankrupt a contractor.
4) Once the loan closes we are "no longer the consultant" however we then work for the lender as the "draw inspector" on our projects.
No where in our job description does it say we have to, or are expected to, manage the contractor. On the contrary we "consulted" and told you right up front that "YOU are the boss, YOU are responsible to choose the contractor, YOU are responsible to call the contractor and communicate your pleasure or displeasure with the contractor.
As an inspector to monitor the progress we are typically out to see the property about once every 30 days so "the borrower", being there nearly every day, must call the contractor and insure they are on the job when it appears they aren't.
The Homeowner/Contractor agreement says very clearly that once the project begins the contractor should have someone on the project working each day until it is completed so feel free to call them and let them know when their employee(s) don't show up on the job.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process..
203k loan limits don't go high enough for my neighborhood
I'm afraid that is the harsh reality in many neighborhoods. What then, is the answer where the homes in my area are selling in the $1MM to $3MM or more. Not a problem at all. As all is good with another renovation product that is available and our group of renovation consultants can help you with that as well. This is just another reason that you should chose a "team" to close your loans faster.
The parameters for the loan I'm referring to will be disclosed mid February but you can start inquiring right now. This lender loans in all fifty states and the permanent loan includes renovation money. The maximum loan amount is $3,000,000 and of course there is a higher LTV required so you could be buying a home in the $4-5MM range including renovation costs and with your down payment your loan amount would top out at $3MM.
Get your renovation loans with one of our Team Members - Our consultant that cover this area is Pete Campbell
High balance renovation loans are now available from Chris Davis at Everbank. Chris will fill you in on the loan aspects of this product but the short of it is that you now have a renovation loan that covers the higher end home up to $3,000,000 loan amount.
This is an amazing loan product and it doesn't have to be the entire amount... I've actually had a couple of calls where I was asked if we had a renovation loan for a $1MM purchase that needed $300,000 in renovation... YES, of course. LOL, the loan has a cap of $3MM but that means anything up to $3MM will likely fly just fine. I love this business.
While this loan is going to be available nationally shortly, it is only currently available in the following states, AZ, CA, CO, CT, FL, MA, MD, NJ, and VA. Comming to all other states as fast as the local LO's in those states get their in-house training on the program.
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.
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
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process...
The following story is NOT about any one lender as there are a few out there that do this... I had one that ordered a "feasibility" each time he really wanted a full consultation. He will never change.
Recently a lender hired a consultant and asked the consultant to call the client to set up the appointment. The consultant called the client to make the appointment and indicated he would need to pick up his fee at the time of the inspection and it would be $729 which included the mileage fee based on the projected construction cost. This is a typical fee for our services btw.
The client proceeded to tell the consultant that the lender told him it would only be $400 and they would bill the balance to the escrow if they decided to move forward with the project. If we move forward then the rest of your fee would be billed to the escrow and you would credit the $400 paid for the feasibility report (3-5 pages) to the full report (25-30 pages).
The first problem is that the lender failed to share this little arrangement with the consultant and get their approval. The second problem with this is that the lender had no business discussing our fee payment terms and what we might bill to escrow as they aren't required to help us get our money in the event the client doesn't pay as agreed without doing so in advance. It makes us all look bad. The guideline is clear that the consultant is repsonsible for collecting their own fees from the borrower.
In any case, the client was told that they just needed a feasibility report at this time.
Lets step back and look at this from the lender's prospective
1) Lets order a "feasibility report" and see if this project is even doable... [sounds good for everyone]
2) If it is feasible to move forward we will order the full consultation [Also sounds good for everyone]
3) If it dies here the client is only out the $400 feasibility fee [Good for the client too]
Problem for the client
1) The feasibility analysis is a very quick run through the property, NOT a home inspection. This takes right at 30 minutes to conduct the actual field inspection. We are just looking for the deficiencies to bring the property to the FHA MPS {Minimum Property Standards]. This is a "tool" that helps with the negotiation of the price with the seller.
2) The client may want more than this, the client may want to know how much it will cost to add the new kitchen and bathroom as well as to meet the MPS. This makes it a "consultation" and it is no longer a feasibility. This is fine but changes the game plan.
3) A true feasibility report, by design, is "INSUFFICIENT" to solicit bids. If you give the client more than this it is the consultation/home inspection/full report and no longer a "feasibility" and the consultant has earned his full fee. Some lenders have been purposfully calling a "consultation" that includes a property inspection report and bid specs a "feasibility".
4) A feasibility report is a separate product and used ONLY to help with the negotiations of the sales price when used properly and benefits all concerned.
5) If the project is a viable project and looks like it will fly there is no need for a "feasibility" in fact it wastes time and slows the closing.
6) What we do different is to make the full inspection, if upon that inspection, it is found this project is not feasible, we flip it to a feasibility and write the limited report so the sales agent has a tool to renegotiate the price and then we charge the lessor fee. But we have had the time to actually inspect the home more fully and now have a much better idea of what is needed.
7) If we go out to do a feasibility report and run through the home quickly make the report and then the full consultation is required, It will require another more extensive inspection and thus carries another "full fee" for the new product.
We have done hundreds of "feasibility analysis reports" and they typically result in saving the client $15,000 to $75,000 and some have saved the client from buying a home that would have slid off the hill. I remember one that there was so much subsidence that I was able to show the client where the home had actually moved nearly two feet towards the street. The fix was about $200,000. The agent called me later and said the sellers hadn't disclosed that fact but seemed to know it when they dropped the price by $175,000.
My question to you is "was the $350 fee we charged for this feasibility worth the feepaid?" Of course it was, so was the one where the sales price was dropped by $15,000. It clearly has it's place.
When doesn't it have it's place?
If you are trying to close fast, then don't waste your time with a feasibility report. When you provide your consultant with the "construction budget" figures order the "full consultation" and with that budget in mind we make the proper inspection at the get go, and allow enough time to do that. In the event we see the project is way over budget we automatically change gears and provide the lessor report at the lower fee and send the Realtor back to renegotiate the price.
Lets address collecting our consulting fees up front which is standard practice
The consultant is like a home inspector or appraiser in that regard, we all collect our fee up front. The unique thing about our fee is that it is typically reimbursed to the borrower at closing of the loan. You can actually provide an "escrow instruction" to your title company or attorney and let them know you have paid $729 (in this example) to the consultant and you want that accounted for and added to the borrower's contribution to the escrow.
The FHA guideline is very clear on the collection of our fees from the client to state that the lender IS NOT required to help us collect our fee. Therefore the LENDER doesn't have the right to tell us to take our fee at closing. They don't have any say in our fee collection process. They certainly shouldn't be making promises that haven't first been okayed by the consultant about those fees.
Conclusion
If you want to close faster order the consultation. If you have lots of time by all means, order a feasibility but if you want to save money and want to move into high gear to get your loan closed faster then order the Consultation and forgo the feasibility report. As long as your consultant has your construction budget in hand, you should move much faster to a close. Payday for you and then the work can begin.
There seems to be a disconnect between the lender's definitian of a "feasibility report" and what a feasibility report actually is. We have lender clients ordering "feasibility reports" pretty regularly and when quized on their order it turns out the were actually referring to a full consult.
Definitions are as follows: What we do for our fee
Full consultation
The consultant will go over the rules of the 203k project parameters, discuss some offence, assist with ideas of how you might better utilize the space, get the most bang from your buck, and work with the client to provide a “scope of work” that includes the HUD/FHA minimum property standards (MPS) and what the client may want over that minimum while keeping in
mind the amount the client’s budget. We then provide a comprehensive report that includes about 99% of the paperwork the lender needs to go to underwriting. This process was designed to take two weeks. Sometimes a bit less, sometimes a bit more time will be required.
Feasibility Analysis
This is a quick look at the property for the buyer or the seller of a property.
Sellers Report
- If a seller wants the highest possible amount for their property and they understand it needs work this product is a must. We provide a limited report that identifies the items that are health and safety or of necessity under the HUD/FHA Minimum Property Standards (MPS). This is all the seller is interested. What repairs are needed to bring my property to the MPS to get it sold.
- If the seller is a bank or lending institution we also provide an estimate of the cost for repairs that most potential buyers might do such as update the kitchen or bathroom(s) where they were adequate for MPS. This gives the potential buyer info they need to make a decision now.
Buyer's Report
- If a buyer is about to place an offer on a property that requires repairs they must have a clear idea of the cost to make the repairs. If the property is being sold for $250,000 and needs $150,000 in repair it must appraise at $400,000 or it doesn’t make any sense to buy it. If the value after improvements to MPS is only $350,000 then the home is only worth $200,000 “as is”. Knowing that number for the repairs is part of your due diligence prior to purchase of a fixer.
- On the other hand, the buyer may also want to know the cost of the additional repairs they may want to add to the mix. In that case a Feasibility Analysis from The Mike Young Team will also provide a quick estimate of those repairs as well. So you actually get two estimates, one for MPS which is used to help you with your offer and, the second one with your additional improvements that make this YOUR HOME.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
I need more money for my renovation project than the FHA loan limits. Is there a higher balance loan available for my project?
Yes indeed, there is. There is another product out there than is available up to three million ($3,000,000) loan amount. Is it 3.5% down, of course not but typically when someone is looking at houses in that realm they quite often pay cash so a 65% LTV is fine.
Just because that is the limit doesn't mean you have to borrower that entire amount. You can borrow up to that amount and the down payment is variable, the more you borrower, the higher the LTV. Make sense?
We had a job the other day that had a purchase price of $745,000 and just over $115,000 in renovation, this program would fit this scenario. How about another where the purchase price was $1.5MM and it needed $300,000 in renovation.. on the surface it would work however it turned out to have 14 structures on the site and part of the construction would be to remove all but three of the structures and keep the log cabin and renovate it... NOT going to happen with this loan product as it specifically states "no log cabins". They must have seen that one coming.
If you have a possible project please call us and we'll send you to the right people to get it funded for you. Remember that your consultant should be the first one on the job to help you with the scope of work and to help you find that "contractor" fit for your project.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
What does a typical 203k project look like? Here are a few that we saw in the past year...
San Jose. Needed a new roof, heating system was well beyond it's useful life. Vegitation growing all over the home... clinging vines, dated kitchen and bathrooms. Seller ignored repairs for years thus a lower than typical sales price would be in order.
Duplex northease of Davis. Lack of typical maintenace over a long period of time caused damage to wood members that might have been avoided with normal owner preventive mainteance. Seller should eat the loss here as this never should have gotten this bad.
SFR in Vallejo. This cute home just need some updating and weatherization.
SFR in SF had an illegal lower level unit. Someone convered the basement to a second living area but forgot to obtain permits and then failed to use common construction methods. Seller should carry the brunt of the cost in a lower sales price.
Pretty much anything is a typical FHA 203k renovation potenial property. If you are trying to sell a home with a bad roof or a marginal roof and it leaks just after the home is sold, you will likely get sued... not if you had suggested a 203k to replace that faulty roof as it would be a warrantee item.
Mike Young, 203k Team Leader
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.com. If you are looking for quality203k software for consultants to speed up the underwriting process..
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
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Limited 203k, the new name for the old Streamlined k product with FHA. Where you get the money to purhase or refinance a 1-4 unit property and get the money to make the repairs or upgrades all in one low interest loan.
You can always tell when a lender is transitiioning into the standard 203k realm when they have been doing the limited 203k for so many years. It is easy because they ask for an invoice from the contractor for the items they want to get paid on. Not necessary for the lender to do that.
On a limited 203k that practice is common practice but on a Full or Standard 203k the draw request prevails and is the only required paperwork from the contractor.
HUD/FHA felt there was too much confusion with the name Streamline k versus the FHA Streamlined Refi and it was a bit confusing to those who hadn't heard of the 203k. Why hadn't they heard of the 203k is beyond me. It has been around since 1961 and is going stronger than ever.
Sreamline k loans now and hereafter referred to as "Limited 203k" loans always provided 50% of the materials cost 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 provided the full 50% per the guideline.
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);
prepaid architectural or engineering fees;
prepaid Consultant fees; [reimbursed to the borrower]
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 pretty 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.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Overview Conference Call for Mortgagees and FHA-Approved 203(k) Consultants
FHA will host the following conference call briefing session that will provide an overview of the published versions of
Origination through Endorsement’s 203(k) program and 203(k) Consultant sections:
· Date: April 9, 2015
· Time: 2:00 PM - 3:00 PM (Eastern)
· Title: SF Handbook 203(k) Product and Consultant Requirements
This may be a very interesting conference call. If you need th phone number and access code please contact us or HUD
** This turned out to be a very "non productive" call. They have made significant changes that throw more on the shoulders of the consultant and taken it away from the lender... then didn't address the consultant fees which haven't been revisited in twenty years. Inflation alone typically doubles the cost of things each ten years... example: $100 fee would become $200 in ten years under normal inflation and then $400 in the next ten years after that. Therefore our fees should be $400 by natural inflationary demands. Most of us are at $250-300 which seems fair to all and has been working well. Any type of control of our fees would be considered "price fixing" and is already against the law of the land. We may have to start a class action suit to get everyone to wake up that the guideline is just that "a guideline" and not an absolute.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
For Standard 203(k) transactions, Mortgagees may disburse the following at closing:
permit fees (the permit must be obtained before work commences);
prepaid architectural or engineering fees;
prepaid Consultant fees; [reimbursed to the borrower]
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 pretty 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.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
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
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process...
Award winning 203k Software for consultants and lenders
We received an interesting call the other day from a competitor who was trying to sell their software to one of my staff consultants. We learned all kinds of stuff about our software and what it couldn't do. We had to laugh because in every instance we could do what they said we couldn't do and what makes it more interesting is that we have been doing all of those things for 8-10 years in all cases.
I can't tell you what our competitor's software may or may not do, I would be folling myself to be so presumptuous. What I can tell you that our software was voted the easiest to underwrite for it's output by a national association of mortgage lenders. 98% of the 400 attendies told the story for us. I can also tell you from actual experience that I took over two projects recently from two different "consultants" both using our competitors report software and it showed me just how far superior our software is to the competition.
The reports were confusing and poorly put together. They required too much reading just to see there is nothing there to read. If you are using this other software I can now tell you without a doubt that you are using a toy when comparied to our product. You will save about an hour writing each report and about a half hour to an hour in performing each draw inspection. Every consultant I have talked to that admits to using this other software isn't happy with it but they are used to it. So we have offered a solution. A FREE 3-month trial of our product to any existing consultant so you can actually test the product and our claims. All I ask is that you read the user's manual we provide. If you feel you would like to actually watch a project being written we can set that up for you as well.
Why do I say for "Lenders" too? There are allot of streamlined k loans out there, soon to be called the Limited 203k btw. Lenders use our software because it is so very simple to learn and navigate. It also allows you to input up to five trade contractors and then kick out separate HomeOwner/Contractor Agreements and separate "Scopes of Work" for each contractor in addition to all the other paperwork you may need to complete a project. There are a number of lenders who "require" the use of our software to speed their underwriting process. We do offer our lenders who agree to use our software output exclusively a special discount to their consultants. This helps the lenders close loans faster by being able to have that consistency and brevity.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
This one gets me all the time. You forgot the case number, here it is please insert it on each page of the report. I'm surprised you forgot it with as many of these as you have done.
LMAO, the case number is ordered after our report is completed and turned in. It is ordered when the order the appraisal, they can't order the appraisal till they know the cost of the repairs. It is a "catch 22" for sure. There isn't a week that goes by that we don't get asked to provide the case number on all the forms. It is actually a pretty simple thing to do with our proprietary software. We merely add the case number and reprint the report with a push of a button then send that pdf to the client and their lender.
If you are a 203k or a HomeStyle® Renovation Mortgage lender and would like to try our software for FREE to kick the tires please request it and we are happy to provide it to you. It is actually an asset to many who only do the streamlined k, soon to be renamed "Limited 203k". Our software output was voted "easiest to underwrite" by a 98% margin over our competition. If you haven't tried it ask for a free trial. If your consultants reports are adding correctly or are just leaving too much work for you.. give ours a try.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
What is your consultation fee? That is nearly always a question that gets asked. Well, it is on our order form to make it easy for you to fill out your GFE - Good Faith Estimate of fees and charges. We have attempted to make it so easy and efficient. If you are a lender placing the order and you have ordered before with the same company, you need not fill out all the company information each time, your name and phone number are sufficient. Save yourself some time. It is however a great asset to be able to copy and paste the informaton on the order blank. It is imporant to know the fee your client will be paying for full disclosure purposes but we will need to know the construction budget. Since our fee is based on the amount of the construction it is important to have that little piece of information so we can quote you a cost. You should also know that there is no protocol for the consutant report and many consultants do the bare minimum for their fee and then we have some, like us, that go way overboard to spoil our clients. We always attempt to "deliver more than you expect". This week one client stated in an email "It really is very helpful having you as our consultant Mike. Like you said the first day, we will need you in our corner and it does feel like that indeed. So thank you." It is our intention to provide our clients with the best possible product and service they can get. Some get it and some never will. Happily most get that what we do is way beyond what is required and we do it for the same price as those who don't.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
It may sound like a good idea. I get my hearing aids next week, then maybe but for now... please use our order form. The GFE is also on page 2 of the order form.
What happens if I'm sitting at my desk? It is great but the names I had thrown at me today were so difficult to understand for a partially deaf man. I felt like a fool having to repeat what I thought I heard several times.
So I think I finally have it... did I have to pull myself away from the project I'm working on and become a receptionist. Sure enough. You might say "don't answer the phone then." Right, you know what happens to a home inspector when they call and you don't answer that phone. They call someone else. It is always best to place the order in writing, we have a handy order blank and it makes it so much easier and I don't have to listen to the form and say "what?" too many times.
I am also an inspector and see homes 3-4 days per week. The other day I was in the basement when they called an order in. Fun to say the least. It keeps my life interesting. I think I'll try to turn on the microphone on my phone and see if it will transcribe the information. what an idea. Go ahead and call those orders in. LOL
Sure we can. In fact this week we added another four or five.. All of them went something like this -
I get a call and they ask to be on our list, I tell them to send me an email with all of their contact information and they all must hear something I didn't say as they ALL sent
Name
Company name
Phone number, and of course I do have their email address.
Possibly a web address, I guess that is so I can look it up more easily.
And that is all. Yep, that is what they think all of their contact information consists of. Yet when I input it into a report the lender expects a "license number", full address, not a PO Box, email address, name, company name, etc.
I must be saying it incorrectly as they all did it. What is so hard about
Name
Company name,
Full physical address
PO Box if you have one
Phone number
License number
I hope they know that we need this so we can mail checks, visit their site to see they are really there, email paperwork to them, call them if needed. Did I say all them have been in business from ten to twenty years and still can't get it right?
If you want your contractor on any list, make as easy as possible by providing all of the necessary information at one time on one piece of paper. One of them sent a second email and failed to reply to that one so I had the first bit of info, I had to find that other email to get him into the system. Ya gotta love 'em.
I really enjoy speaking to realtors and agents in groups. I like to ask them if they ever get a client in their office that tells them they have no down payment... they all say "Yes" then I ask "do you send them out the door quickly?" and the laughter is overwhelming. I then ask them to take the newest agent in their office and send those would be borrowers to them instead of kicking them out the door. then I ask if the new agent will just bring those people to one of our FREE open to the public seminars and we'll turn them into real buyers... with our network.
Everyone stops laughing about that time and want to know when we are having our next FREE seminar. It is amazing that just a moment ago they were ready to kick that borrower out the door and now won't turn it over to a new agent.. ha. I like new agents because they don't have pre concieved ideas and are more easily taught. Come join us at a seminar and we'll show you how it is done... We really like making deals in that room on the spot. You will too.
This 203k basic's training seminar is wonderful for networking and getting your homes that need TLC sold quickly. We'll talk about the streamlined k now referred to as the "Limited 203k" and the Full 203k, touch on the EEM and how you can use it to actually get more money than the maximum mortgage limits set by HUD.
Mike Young, 203k Team Leader
With offices coast to coast and HQ now at 1351 Oliver Road, Fairfield, CA 94534 - 704-451-1599
I'm the last one to talk about the competition's product typically because I don't know what their product does or looks like... I say typically since I just had the opportunity to take over a couple of projects where my competition's sofware was used... what a nightmare. It took 45 minutes to do a draw inspection versus about 10-15 minutes using our software.
I learned first hand just how mure more powerful our product was. Now, I can actually state that if you are using any other product we can save you lots of time on your draws. Underwriters have voted us #1 for underwriting the loans. That means our product helps get the loan closed faster. Our competition takes 12 pages to say what we say in 6. Why would you want to look through 12 pages to find the answers you need versus doing it in 6 pages?
This is like playing the game with as a toy versus a tool. I challenge anyone who is currently a consultant to use our software for 3 months and tell me different. I think once you try it you will fall in love with our product. I'll give you a free 3 month trial with proof that you are using our competitor's software. You will be the big winner.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
When this project was completed within budget I thought nothing of it that the client asked if they could use the contingency to paint the exterior of the home. To my
surprise as I was traveling out to see the finished job I was listing to a real estate talk show where they had just stated "the worst color you could paint your house to get it sold fast is "BLACK". Then I pull up and see this charcoal black house... too much and too funny.
This morning on my walk I saw someone in my neighborhood had painted their garage door, trim and gutters "BLACK" too much. What do you think?
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
203K Training Center Offer an Overview of How 203k Consultants Complete a Feasibility Analysis Process
Throughout a 203k project, stakeholders must complete the required documentation to ensure that the project is completed according to the industry regulations. During the 203k consultation process, 203k consultants will complete a feasibility analysis, which will determine the scope of the repairs required on the property. This complex process serves a unique purpose for both homebuyers and sellers. The team at 203k Training Center provides a comprehensive overview of the analysis process.
Feasibility Analysis Provides Buyers a Foundation for their Decision
Buyers will need to know, before the repairs take place, whether the value of the repairs will help them to receive a return for their investment. Properties must meet the minimum living standards set by the HUD. This often requires properties to go through significant levels of repair and means buyers must closely review the required repairs and the price of the property to ensure value is achieved. Buyers can also use the feasibility analysis as a means for seeking out specialist contractors. Many 203k consultants also work with buyers as they pick out contractors for the work, this is because the 203k project experts have experience in this process and can help to mitigate problems with poor workmanship and rising costs as the project moves forward.
Analysis Could Help Streamline Negotiations
With complete clarity of the levels of repair required within a 203k project, home sellers might be more willing to negotiate a deal with the buyer, thereby minimizing delays in the transaction. The feasibility analysis will highlight the costs required and will compel the seller to consider whether they are willing to pay for the repairs or hand the property over to a buyer to complete the property upgrades.
Sellers can Achieve True Value Through their Feasibility Analysis
A 203k feasibility analysis report will help sellers discover the true value of their property. With the information on the repair work required at their disposal, they can then present buyers with the facts on the property and determine whether they themselves wish to pay for the repairs. If the repairs are completed through the seller, they will then have leverage when selling the property in future.
Realtors can Promote Properties More Effectively with Tangible Data
The facts concerning the property within the feasibility analysis will also be of great benefit to the realtor. Giving the full amount of information to buyers at the beginning of the purchase process will help to improve communications between the buyer and the seller, thereby making the realtor’s job far easier and ensuring a more efficient working process.
It’s important to work with trusted and qualified 203k consultants for a comprehensive feasibility analysis. To learn more on the process and its benefits, visit http://www.203ksoftware.com/. Qualified experts are standing-by to respond to questions.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
The latest 203K Training Center Software guides professionals on How to Become a 203K Consultant
203K Training Center has recently introduced new software designed to streamline a professional’s path to becoming a qualified 203K consultant. The company’s 203K software for consultants will provide clients with everything they require to work with lenders and complete a 203K loan with seamless precision from their very first project.
203K loans are designed to provide homebuyers the funds they need to both purchase and renovate their property through one singular mortgage contract with a lender. In order for both the lender and the buyer to be protected as part of the deal, a specialist needs to review the property and ensure that the property’s condition is suitable for a future 203K loan. It requires a special set of skills to begin analyzing potential properties for 203K loans, and these skills are now taught through the 203K consultant training software from 203K Training Center.
203K Training Center is offering cost-effective pricing on their latest software, which has been designed to provide consultants with seamless entries into their 203K projects. Each solution offered by the company is designed to streamline such processes as populating forms necessary for 203K completion, as well as prompt consultants at various stages. In addition, the software will help generate the necessary reports for 203K consultants to complete their work effectively and within a limited timeframe.
The software offered from the 203K Training Center is the most effective solution designed to streamline complex 203K projects.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
If you have all the work you need already then maybe you don’t need to know about the FHA 203k loan program but there are allot of you out there that have been buying my eBook “Contractors and the 203k” indicating that many of you are becoming aware of this program. Why is that? Simply put “more business” than you can handle.
When I take on a new contractor into our “203k Team” we ask one thing of them “Stop us before you get too much work from this program”. The last thing any of us want is for you to get a bad reputation for not being able to get these projects to completion in a timely manner and we have had some that don’t know when enough is enough until we start getting bad service. So… please just pull back a little when the time comes and then open the spigot again when it appears you are about 3-4 weeks from needing more work.
There are two types of FHA 203k loans. I will describe the differences below and YOU need to know them and choose the right one for your circumstances:
This program uses a 203k Consultant to create a bid specification. That specification is sent to you, the contractor for your bid. It is typically a blind bid situation. In some cases the contractor has already put in a bid for the work they think will be required but in many cases they aren’t aware of the HUD Guidelines so they may miss a few things but overall this seems to cut down on the time it takes to close the loan so it isn’t all bad. If the borrower has several clients come out and bid the project prior to seeing us to create the “scope of work” it can be a mess. As much as the client tries to have them bid the same project if you don’t write it down each contractor will have their impression of what they thought you said and each bid will be slightly different and the client will not have a clear bid that they can use.
I prefer to be the first one on the job to create the specification of repairs. I also will bid the job (never will do the work, just bid it) so the client has an expectation and we all know this project is still viable.
There is no “up front money” for this program. The contractor must be well healed and have credit or money or both to get the project started. Since each draw must be no more than 30 days from the prior one the contractor should have enough money to carry his/her business, materials and labor for that period of time plus whatever they need to run the rest of their business. This program allows for interim draws and you can get partial payments for anything that is partially complete but only for completed work. Some lenders will follow the guideline and let you get money for cabinets and finished flooring up having it delivered and stored on site. Some lenders will advance 50% of the window and cabinet materials money only when they are custom sizes and the check may be made out directly to the cabinet maker or window manufacturer.
This has been and can be a difficult situation for a small contractor or a contractor growing too fast. They need, heck, we all need “cash flow” which is the life blood of every business.
This program was intended to make the program easier to use for the majority of the lighter renovation projects. The significant thing with this one is that it cannot have any “structural” component. It is intended for smaller projects and though the maximum construction costs are limited to $35,000 per the Guideline in reality it is only $30,000-34,200. If you come up with Streamlined “k” loans where the work is $35,000 and your lender only does the Streamlined “k” you will be disappointed most of the time. The $35,000 must include the costs and fees associated with it. The $30,000 figure is due to the requirement of many lenders to maintain a 10% contingency reserved which takes a $30,000 right to $33,000 immediately.
The big thing here is that there is “up front” money for the contractor of 35-50% of the construction cost. The project must be completed in no more than 60 days, and there is only one final draw at the completion. No other interim draws.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
I'm still amazed at the number of asset managers that still insist that they won't take FHA offers. I was just listening to a weekly radio show featuring the 203k and the moderator hits them right between the eyes...
Asset managers, wake up and smell the roses, please. If you are excluding the FHA 203k you are not getting all the sales you could be getting for your clients. If there are any banks out there that have distressed properties... lol. Let someone familiar with the 203k list them for you... You will find that you will sell them faster, get more money for them, not have to fix anything, all work happens after you are paid and out of that asset. Yikes! It is everything that you want...
You want to get the economy back on it's feet fast then stop giving big banks bailout money they don't need. Let the banks, who have already written off the losses, donate their properties to the counties where they exist and take another write of. The counties then sell the homes fast at any price... satisfying their "affordable housing" requirements, gaining tax money, gaining new tax basis, and getting fixers out there on the market so local contractors get very busy, lots of them will have to hire people to get these home fixed up... home prices will stabilize and go up... maybe that is too easy.
I heard a person on a radio show a moment ago saying that the best economy ever was in 2000... NOT. Think back a little farther back as I remember it was when we lowed taxes and let the people spend their own money... locally. If we are looking for more stimulus reduce or eliminate the corporation tax on small corps or LLCs that don't make $200,000 this year... the people will start thousands of little businesses and many will hire one or two but that will calculate to hundreds of thousands of jobs at the local level and not all highway jobs. Sorry, but all corporations are not big companies
I'm telling you, if you want to stimulate the economy then let's take the houses that have been foreclosed and turn them over to the cities in which they sit. Let the cities get the homes that the banks have already written off against other profits. If that were to happen you would see every community getting money into their local economy and creating jobs in their own neighborhoods, and providing meaningful work down at the grass roots level. Imagine if we put these jobs back on the market how fast we would see people shopping in the stores and the economy returning to a more normal situation.
Those of you in Santa Cruz be aware that Santa Cruz Home Mortgage has just made a commitment to do a lot of educating and 203k loans in that area. In fact Tammy Blanchard is in the middle of one right now. I'm sure if you give them a call you will find them receptive to bringing their training to your RE office to enlighten you.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
See you February 16th, in Sacramento, CA at 4-Points Sheraton near the airport off of I-5, 6:15 pm - 8:30 pm... You will learn "203k Secrets" and how you can use the 203k in your business. Our host will be Daniel Posehn of the Wells Fargo Renovation Team We look forward to seeing you there (if you have a ticket). If not then please go online and get a FREE ticket while they last.
See you February 23rd, in Concord, CA at Denny's Diner on Willow Pass Road at Diamond Avenue, 6:15 pm - 8:30 pm... You will learn "203k Secrets" and how you can use the 203k in your business. We look forward to seeing you there (if you have a ticket). If not then please go online and get a FREE ticket while they last. Our host will be none other than Tim Floyd of Wells Fargo Home Mortgage
FSBO sellers please bring your properties, we will couple you with a buyer and agent provided you will agree to pay the agent for selling your home.
Learn how to get more than the appraised value for your sale or on the other side of the coin, how to bid higher than the other guy for a home and get the financing to warrant the higher price.
What to look for in a property so you aren't going for the same thing that everyone else is. Find you diamonds as they lay among the weeds that everyone else is trampling.
Investors with properties to sell fixed up or needing work makes no difference we have the buyers.
Buyers, if you are tired of bidding on homes only to be out bid time and time again, we'll show you some homes that you won't have an issue like that and if you want to bid higher than anyone else we'll show you how to get the home you want.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
The 203k loan program is just like any other tool you may have at your disposal but if you don't know how to use it, it is a wasted tool. It isn't for every deal, but if you put it in your arsenal you can bring it out whenever the need arises and fell confident that you know how to put it to use. Won't you join our team? If you view it that way and add it to your arsenal of creative answers you will be a more complete professional. While it isn't the answer to every situation it is a valuable tool when you actually need it. Learn the process and it will serve you when you need it. If you need assistance or a friend in the business feel free to contact us either on this blog or by email or phone.
We will assist you even if we aren't involved in the transaction. I hate to see deals fall apart so don't be shy just make he call and we'll put our heads together and save your commission.
The 203k loan program is a Team Effort if you know what you are doing you will be part of a team, create your own, we can provide 203k training to your favorite home inspector or contractor and have them up and running.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Posted by Mike Fust on August 12, 2009 at 11:13 AM under
• 3 comments
As a 203k Consulatant and a Energy Manager, I rountinely perform a energy analysis in trying to secure the Energy Efficiency Mortgage componenet of the program for my clients in the NYC area. I have ran into some very staunch opposition from lenders, who have refused to process the EEM. I have even been denied payment for the energy audit, due to the lenders inability to understand the cocept of energy efficiency and how it not only relates to reduced energy consumption for the purchaser, but how the energy cost could be just as consistent to purchaser. I think that the lenders unwillingness to embarace the EEM is two fold. One, they do not want to prpocess the loan, or they can't process the loan. Two, there are not enough Consultants who even know hat a HERS audit is. hOW CAN THERE BE A EEM, WHEN THE CONSULATANTS AND LENDERS DON'T HAVE A CLUE????????????? We would like to change that. COMING SOON TO THIS WEB SITE, "ENERGY TRAINING FOR 203K CONSULTNATS". PLEASE FEEL FREE TO EMAIL (mmenergy2007@gmail.com) or call (917 345 6141) if you are interested in taking your business to the next level.
We are interested in your 203K course but our biggest concern is learning how to gain the business, who to market to and how to contact key people. Do you have help in this area?
We can use more consultants all over the country. I'm happy to take you to the next level when you are ready. Follow the links below to learn how you can become a 203k consultant. Actually the more there are in an area the more business everyone seems to get. I can litterally go to any large city in the USA and create a 203k presense that would support me within 60-90 days. This product is all about letting people know you are in the business and what they can do with the program to better their lives. Always put the client first and you can't go wrong.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Does the "termination date" column in the HUD inspector lookup results means the inspector is no longer certified?
Yes, exactly that simple. It might be for not answering his phone when HUD calls to verify your phone number or it might be for some other more serious reason.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Posted by MikeY on April 5, 2009 at 5:10 PM under
• 1 comment
If you are thinking that real estate investing may be a good thing for you the 203k could be a great way to get your feet wet. While FHA requires an owner occupant or a non profit, a young entrepreneur might think about a mixed use building rental property and convert the rental units to no more than four. The store income cannot be used to help the borrower qualify but the other residential units can.
We did one in San Francisco that there was a four story building and one unit on the first floor and 3 stories above with a flat on each floor. The property had been in the 'family' for many years and the rental units had been pretty much ignored and needed extensive work to be livable. The proprietor wanted to live close to his store for security and since the family had owned it for many years the existing debt was zero. This was a simple decision to bring this property up to code and make the rental units pay for the renovation. A 'win win' situation and the City of SF won too.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
Your 203k Consultant can make or break you. Typically you want someone who has done a few. They shouldn't be experimenting on you. Now that I've said that you don't always get what you want. If it isn't available or you have a new consultant who has just contacted you that "enthusiasm" can be worth a lot. If your new consultant has done their homework and taken the time to get some training you may be just fine.
We have had people call from areas where there were no consultants on the HUD list but the need was there. They had a contractor in some cases or a home inspector in others that knew how to make the inspection, we took those qualified people land were able to train them in how to conduct the consultation and write the finished report in such a way that they appeared like seasoned pros with their first consultation. We are in the process of doing that again right now in a remote area of Northern CA. If you are a lender and have been copying the required HUD forms from the 203k handbook, filling them out by hand, and turning them in with your underwriting submission, you are wasting your time. Our trained consultants do all that for you.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process.
FHA loan limits have been increased dramatically and that includes the 203k. Some real estate professionals are missing the boat with mixed use buildings, warehouses in residential neighborhoods, and larger income units from 5-8 units... all of these are 203k potential.
Warehouse - turn it into "Live/Work" units up to 4. Yes the owner must live in one unit but many people would live in a "Live/Work" unit know lots of other people who might like that too and become tenants. The additional rental units add income to the borrower's other income. If they can qualifiy for a SFR then they will likely qualify for this.
Mixed Use - ignore the commercial and work with up to 4 residential units in the building. If you could steal a 3 story building with multiple units... make them flats with commercial on the bottom floor only...
Start looking through your MLS files for larger type buildings that might fit these scenarios. We are here to assist you wherever you are. There is a "little known" feature of this product that allows "non-residential land use to residential use" if the zoning will allow it.
Mike Young, 203k Team Leader
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.com. If you are looking for quality 203k software for consultants to speed up the underwriting process...
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. 
The result after the rear porch was complete and handrail installed. The home now has
SFR in Vallejo. This cute home just need some updating and weatherization.
SFR in SF had an illegal lower level unit. Someone convered the basement to a second living area but forgot to obtain permits and then failed to use common construction methods. Seller should carry the brunt of the cost in a lower sales price. 
