Owner Occupied Home and in Need of Rehab?
Hi everyone!
Rehabbing America is a concept that I embrace, not just for investors, although, if you have been reading my blogs, we are all investors! There is a real good, hardly used program for rehab money that is insured by the Federal Government through HUD. This is the 203K loan. Fancy titles aside, this loan is for only owner occupied purchases. So, if you are buying in Volusia County, Flagler County or any county in Florida, and you intend to live in the home as your primary residence, you may be eligible for this wonderful mortgage. Here is how it works. There are some mortgage amount limits. This is according to the county where the home is located. Anyway, let us use the following example for this type of loan:
You buy a home for $150,000 and you need about $25,000 worth of repairs. The purchase price is still the same, but the mortgage is augmented by the amount of the repairs. Now, the repairs must be at least $5,000, and the money needs to be used for more than just cosmetics. In other words, not just for a pool unless there is a pool there that is not in working order. I know a case of one client who bought a home that needed a kitchen, not because there was no kitchen but because there were no cabinets in the kitchen and the refrig was in another pantry type room, so a new layout was proposed and the work approved.
What happens is that the current owner closes with you on the home, he or she gets their money and then the repairs begin. A consultant must view the home to make sure there are legitimate repairs and renovations, write and submit the estimate, the bank approves and the loan is processed and closed and the borrower gets the money on a draw basis when each step is completed. The lender writes the checks upon the consultant affirming that the work is done to avoid abuses in the program.
Here is the exciting news: this program is offered as one loan, 30 yrs fixed, and the rates are just about 1/2-1% higher than regular rates. As you may know, most renovation loans start at about 14% to 21% with 5-10 points, although we are the best priced of the bunch!!
Now, if you are going to live in the home, you can look at really low, low rates and lowest down payments!! Interested? Call me and I will customize a program for you with all the information you need and help you change the scream home to a dream home! Almost any home can become a wonderful place to live. Some homes are currently in violation of their legal status because people build illegal rooms, extensions or convert garages to living space and then you cannot get a mortgage. Or maybe a home needs a roof and the current owner cannot afford to put a new roof on the property. The lender can deem that home not a good candidate for a mortgage, so this program becomes so important because you can use the loan to bring the home into compliance!
As a matter of fact, as long as there is a foundation, the loan can work for you. I will talk to you individually about the limits in each area when you find a property you like except to say that in Volusia County which encompasses Deltona, Daytona, and Ormand Beach, maximum mortgage limits with the rehab are $230,177 for a one family unit, and $259, 252 for a two family unit. Call me for three and four family limits. The closing costs and can be rolled into the loan.
One more thing: let us suppose the home cannot be lived in right away; in that case, you can even roll up to six months mortgage payments into the mortgage so that you do not have to pay for an apartment rental and a mortgage while waiting to move into your home. How awesome is that? year when they are either left the same or increased. I can tell you that as of this writing in Volusia County the maximum mortgage for a one family is $230, 177. That is the mortgage maximum not the purchase price limit. These are full documentation loans meaning you must supply either tax returns or pay stubs and w2’s. Since these are not credit score driven loans, there is wide flexibility in the approval process. There is so much to say about this loan that a mere “blog” cannot answer, so call me and leave a message at my message center and I will call you right back! My phone number is 561-578-0666. Or, feel free to e mail me at jomathisen@aol.com. I have hundreds of products, one must fit your needs.
Since 1984, Joanne has been an owner or mangager of mortgage companies. She is now a Senior LOan Consultant with Advanced Mortgage Solutions of South Florida, Inc. based in Boca Raton, but she writes mortgages all over the state of Florida.
Let’s rehab Florida now! Look for more “Gems from Jo” on all things real estate at FunCoastLife.com