Listing all posts with label Renovation loans. Show all posts.
  1. Permits required for my project

    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".
  2. New Construction Loans

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

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

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

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

    Skype name: the203kconsultant

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

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

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

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

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

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

    Skype name: the203kconsultant

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


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

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

    BAH HUMBUG !

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

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

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

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

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

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

    Skype name: the203kconsultant

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

  5. 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    Mike ready for your 203k order

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

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

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

    Skype name: the203kconsultant

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


  6. 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    Mike ready for your 203k order

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

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

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

    Skype name: the203kconsultant

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

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

    I bet you never heard that before, right? NOT

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

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

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

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

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

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

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

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

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

    Skype name: the203kconsultant

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

  8. What is a feasibility analysis or report?

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

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

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

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

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

    Renovation loans greater than a million $




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

    Now you have renovation financing for those higher end home.



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











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

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

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

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

    Skype name: the203kconsultant

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


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