Northern Michigan Real Estate: November 2009

FHA 203K Rehabilitation Loans

I recently attended a training through Bank of America in Traverse City on FHA 203K Rehabilitation Loans.  This program was presented by Corbin Buttleman, Holly Hack and John Klingelsmith.

Potential buyers for proeprties in need of repairs are facing significant challenges for financing these days.  The solution to this challenge is the FHA 203K Rehabilitation Financing Loan.

Highlights

  • One loan purchase price plus repairs
  • FHA mortgage limits apply for area
  • Minimum rehab $5,000
  • Health and Safety first
  • Customer desires
  • Value based on after improvement value (loan not to exceed 96.5% of improved value)
  • Convert a one unit to a two, or a two unit back to a SFR

Program Requirements

  • Owner occupied only
  • Down Payment 3.5% of sale price plus rehab amount
  • Allows for 6% seller concession
  • Self help is allowed
  • Loan will be based on contractor/labor total any unused portion returned to customer via principle reduction

Rehab of over $35,000

  • Customer meets with a 203K consultant to determine required repairs and additional items desired from customer
  • Work write up completed by consultant and supplied to lender/appraiser
  • As is value determined and after improved value
  • Loan is processed and closed

Loan amounts under $35,000

  • Streamline product
  • Buyer provides two bids from licensed contractors for any work desired
  • Contractors are registered with Bank of America
  • Loan is processed and closed
  • Buyer receives half of the escrow about two weeks after closing, remainder is dispersed after work is completed.

Rehab Items

  • Structural alterations and reconstruction
  • Modernization to homes function
  • Elimination of health and safety issues
  • Changes to improve appearance
  • Repair plumbing, new well/septic
  • New roof, gutter, downsprouts, windows
  • New flooring, appliances
  • Making home handicapped accessible
  • Energy conserving improvements
  • Renovate existing or add new bathroom
  • New kitchen
  • New furnace/air conditioning

Christine Stalsonburg, Broker/Owner

Cherry Wings Realty

 

 

231-409-4140

 

 

 

 

 

 

 

 

 

View Christine Stalsonburg's profile on LinkedIn

Comment balloon 3 commentsCherry Wings Realty • November 09 2009 10:11AM
FHA 203K Rehabilitation Loans
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