If you are a loan officer or broker, you're probably looking for ways to effectively deal with credit tightening, declining markets, and the disappearance of loan programs. It's possible, especially in Florida and California, that you cover areas filled with foreclosed homes that have suffered from disrepair and neglect. Banks that own these foreclosed properties are often unwilling to repair them. This makes it harder for borrowers to quality for traditional loan programs since the property itself does not meet the minimum standards to quality as acceptable collateral for most conventional loan programs.
A savvy mortgage professional can overcome this challenge and increase his or her business by utilizing one of the most powerful - yet still relatively underused - mortgage programs available: the Federal Housing Agency's (FHA) 203(k) loan program.
This loan program provides the funds for both the renovation and purchase of a home. The maximum loan amount depends on HUD-determined loan limits which are set on a county by county basis. For example, on the low side, a single family home in New Mexico has a loan limit in most counties of $271,050; while in California, the maximum loan amount for a single family home is set at $729,750. You can find HUD county limits at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Some downsides to the 203(k) loan are the extra work and time it takes. However, although there is more involved in completing a 203(k) purchase than a traditional loan, most 203(k) loans can close within 30-60 days from beginning to finish. As to the additional effort that is required, that extra work can translate into a sale that you wouldn't have otherwise had. Thus in the case of 203(k) loans, more work equals more money.
Some of the benefits of a 203(k) loan may include:
* Repairs Under $15,000 do not require 3rd party inspection (Streamline-K).
* Increase maximum mortgage by up to 20% with the installation of qualified solar energy equipment.
* 1-4 Unit Owner Occupied Homes: SFR up to $729,750; 4 Family up to $1,403,400.
If you are a real estate professional wanting to help more borrowers get into a home, the FHA 203(k) could be a key ingredient to your success.
A savvy mortgage professional can overcome this challenge and increase his or her business by utilizing one of the most powerful - yet still relatively underused - mortgage programs available: the Federal Housing Agency's (FHA) 203(k) loan program.
This loan program provides the funds for both the renovation and purchase of a home. The maximum loan amount depends on HUD-determined loan limits which are set on a county by county basis. For example, on the low side, a single family home in New Mexico has a loan limit in most counties of $271,050; while in California, the maximum loan amount for a single family home is set at $729,750. You can find HUD county limits at https://entp.hud.gov/idapp/html/hicostlook.cfm.
Some downsides to the 203(k) loan are the extra work and time it takes. However, although there is more involved in completing a 203(k) purchase than a traditional loan, most 203(k) loans can close within 30-60 days from beginning to finish. As to the additional effort that is required, that extra work can translate into a sale that you wouldn't have otherwise had. Thus in the case of 203(k) loans, more work equals more money.
Some of the benefits of a 203(k) loan may include:
* Repairs Under $15,000 do not require 3rd party inspection (Streamline-K).
* Increase maximum mortgage by up to 20% with the installation of qualified solar energy equipment.
* 1-4 Unit Owner Occupied Homes: SFR up to $729,750; 4 Family up to $1,403,400.
If you are a real estate professional wanting to help more borrowers get into a home, the FHA 203(k) could be a key ingredient to your success.
About the Author:
If you want a Los Angeles mortgage or would like to learn more about obtaining a mortgage, visit the Direct Mortgage website.
