Worried Your Offer Will Never Accepted?

Look for Worst House in Best the Neighborhood and Renovate!

This is also a good strategy if you are a beginning investor. You could buy one primary residence (single family or up to a 4 unit multifamily) a year, renovate, and live in your new home for one year. When you are ready to buy and renovate your second home, you can rent out the first home. Repeat until you want to retire and you will either have residual income from the rent or sell the homes and receive the equity that has been building up.

What If I Don’t Have Cash for Upgrades?

You could apply for a Renovation Loan.

Andrew Wood, Continuing Education Instructor, recommends using a 203k consultant for all inspections – WHY?

***if ever an appraisal comes in lower than expected . . . find something in the home that can be renovated – fill out a change of circumstance form – get a new appraisal and qualify for 110% of the after improved value (the extra 10% is for the contingency fund in case the budget is exceeded – if the money is not used, the fund is put toward your principal balance) ​​​***

***Your insurance premiums could be lower with a new roof or upgraded electrical***

How Much Do I Need for Down Payment?

For a purchase, your down payment will be a percentage of the Improved Value.

Example #1

$150,000 sales price + $50,000 Repair Escrow (+10% Contingency) = $205,000 After Improved Value

3.5% Down Payment = $7,175

Example #2

$300,000 sales price + $80,000 Repair Escrow (+10% Contingency) = $388,000 After Improved Value

3.5% Down Payment = $13,580

What About Pools?

With the Homestyle Program your backyard vacation spot can be possible with a new pool!

If you already have a pool, you can use the FHA 203k to repair your pool

Photo by Engin Akyurt on Pexels.com

What is the FHA 203k and Homestyle Renovation Process?

  1. Loan Approval – Take the extra steps to go through processing and underwriting before moving forward
  2. Visualization/Dream – watch renovation shows, go to home improvement stores to look at floors, tiles, kitchens, bathrooms
    1. Get pictures – BEFORE and AFTER
  3. Contract – figure 60 days from purchase agreement
    1. Get your 203k Consultant and Inspection Report
      1. Here is the list: 203k Consultants (hud.gov)
      2. The consultant/inspector will document MPS ( Minimum Property Standards) and add the wish list from the home buyer
    2. Get contractor estimate from inspection report
      1. Line item bid/estimate from contractor
      2. Floor plan
      3. For FHA no upfront money is given to contractor – work complete, inspection, then receive draw (1 to 5 draws)
  4. Appraisal – Comparable homes are from the Already Improved Value Only – For Refinance, you will receive and AS IS and After Improvement Value and you can finance your closing costs
  5. Closing – The Realtor and Mortgage Loan Originator (MLO) jobs are complete, but can be available for follow up

When Does Construction Begin?

Repairs must begin within 30 days of closing and be completed before the 6 month mark – bigger projects may ask for longer time frame

When is My First Mortgage Payment Due?

Lets say you close on May 15, your first mortgage payment will be due on July 1

If you are paying rent during renovation time, you may ask to get your mortgage payments financed until you move in

We Love to Celebrate!

Send Your Before/During/After Renovation Pics to Your Realtor and Your MLO Wendy Coon NMLS# 1984358 at 616-566-1437 or wendy.coon@htlenders.com so we can CELEBRATE ALONG THE WAY WITH YOU

ADVERTISEMENT | 1-888-628-1414 | A division of Hometown Lenders, Inc., an Equal Housing Lender NMLS# 65084 (www.nmlsconsumeraccess.org) | Terms, conditions, and restrictions may apply. Loan products are subject to availability and credit approval. Not a commitment to extend credit. Hometown Lenders USA AZ BK-0938291. Licensed by the Department of Corporations under the California Residential Mortgage Lending Act.

Published by wendynmls1984358

Hi, I’m Wendy Schweifler NMLS# 1984358, Mortgage Loan Originator. A Country girl who loves all of Mother Earth’s gifts with a passion for animals, helping people, and laughter. Thanks for visiting!

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