Positive Real Estate Professionals

With economic turmoil in many real estate markets it should come as no surprise that foreclosures are also up in many areas of the country. This awful truth has resulted in many properties now sitting empty. The following article by Fred Chamberlin presents some great ideas on how to revamp some of these vacant properties to make them more environmentally friendly and more attractive to potential buyers.

Via Fred Chamberlin of FHA Loans Oregon:

Another reason to use an FHA 203k Streamline rehab loan: Foreclosures are bringing down the Eugene/Springfield and Lane County Real Estate market. My reasoning on this has to do with the condition of many of the foreclosed properties. Many of them aren’t livable and may have been vacant for some time. In many areas of the United States, entire neighborhoods sit vacant, havens for crime and an eyesore to surrounding neighborhoods. Although I haven’t seen this scope of a problem here, I do know that there have been cases of squatters moving into foreclosed (or about to be foreclosed) properties and using them as a base of criminal operation.

How about starting a movement to help take these properties and provide affordable green renovations for buyers in need through FHA 203K renovation loans? Not only would we be fulfilling the mission of FHA 203K, to restore and preserve America’s existing housing stock, but also incorporating money and energy saving green improvements into those homes.

Although solar panels and wind turbines are “sexy” improvements, I want to be realistic about what the individual can do. For that, I am talking about simple and affordable 203K streamline improvements like EnergyStar windows and appliances, low flow toilets and showers with on demand water heaters. Not only would these kind of improvements benefit the planet, but they would also help the low to moderate income home buyers save on their monthly energy bills. That makes their FHA mortgage more affordable, lessens the likelihood they default and helps restore the integrity and quality of the neighborhood by ensuring that its homes are in good condition, energy efficient and OCCUPIED!

The FHA 203K Streamline Rehab program is the ideal way to bring these homes back as great representatives of their respective neighborhoods. When you combine this with the $8,000 Tax Credit for First Time Home Buyers and exceptionally low interest rates, it really is the ideal time to buy a home. Call me today at 541-342-7576 to make an appointment for your one on one time with me.

Fred Chamberlin has been working on a series about buying a foreclosure. This is another edition in that series. I think that he brings out a good point that when you buy a foreclosure, you will need to find a license contractor that will be able to complete all the repairs that will need to be done.

If you have questions concerning this post or any other listed on this site, please ask, that is what we are here for.

Via Fred Chamberlin of Eugene Loan Guy:

Next in our series about buying a foreclosure using the FHA 203k Streamline Rehab loan has to do with selecting a contractor. So far, you have gotten pre-approved for a loan in a specific price range and you have developed a rapport with the Realtor® that is going to make sure you get the proper guidance and support you need. Now, let’s talk about the next very important thing you need to do, selecting the contractor or contractors for your rehab process. This is a very important aspect of your Oregon FHA 203K loan. There are things that you need to look for in the right FHA 203K contractor as they can mean the difference in a successful or unsuccessful FHA 203K renovation.

The Streamline process does not require a general contractor, but may require two or three specialized contractors like roofers or plumbers or electricians. It is your choice who you use for these jobs and you only need one bid, but the underwriter will determine if they think the bid is either too high or too low and request additional bids in that situation.

1.) Are They Properly Licensed & Insured? — To complete a FHA 203K renovation in Oregon most contractors MUST be licensed by the state. There are exceptions, but very few. You can verify their licensing via the Construction Contractor’s Board (CCB) website. If they aren’t listed then they need to be replaced. If contractors have not met the licensing guidelines, not only will your FHA 203K contractor have a tough time pulling permits, but you loan likely will not make it through underwriting in the first place.

2.) Do They Have References? — We check 2 references for each of your FHA 203K Contractors. All we need is a name and phone number of the reference.

3.) Do They Have a Line of Credit? — We don’t require that your FHA 203K contractors have a line of credit but it makes it easier for them to begin work immediately after closing without having to wait for the first draw. The easiest way to avoid any delays is to make sure they can start work immediately and can pay for it by using their line of credit.

Contractors can be one of the biggest issues with your Oregon FHA 203K loan. Since we are FHA 203K experts we want to make the renovation as painless and profitable as possible (and FASTER to CLOSE as well!). For more information on FHA 203K Loans give us a call at 541-342-7576 and we’ll be more than happy to guide you through the process. Whether it be a renovation of that fantastic foreclosure deal or upgrading your current residence, we can help!

Fred Chamberlin wrote this excellent article on what many homeowners who purchase a foreclosure may encounter. Not only does Fred discuss these possibilities, he gives some practical information on how to get the funds necessary to finance the repair work needed to make the house inhabitable. If you are considering buying a bank owned foreclosure, I would definitely recommend reading this post.

Via Fred Chamberlin of Eugene Loan Guy:

I want to talk to people that want to purchase a bank owned property (foreclosure) or currently own an Oregon home and want to make some repairs or renovations to it but due to the current real estate market, don’t think that they can. Current home owners have limited choices when it comes to paying for a renovation. I can think of four different choices: (1) pay for it out of pocket, (2) put it on a high interest credit card, (3) pray your home still has enough equity to take out a home equity line of credit (HELOC) or (4) refinance into a FHA 203k Streamline renovation loan. Purchasing a foreclosure has the same problems, but it has to be done after closing and most lenders won’t lend on homes that are not in decent repair.

Now, I want to show you five reasons why the 203k renovation loan is the best choice when the repair costs are $35,000 or less.

1. Have you shopped for home equity line of credit (HELOC) lately? They are much more difficult to find at a reasonable loan to value (LTV). The banks and investors who used to buy them in the secondary mortgage market have stopped because of performance. Many of the major banks are completely out of the home equity market because they are continually writing off non performing loans. Those that do still offer HELOCs, offer them at a much lower LTV and can cut the LTV at anytime if they decide you are in a declining market. Often times the HELOCs can be reduced in the middle of a project with no advance warning.
2. Renovation loans are based on AFTER REPAIR VALUE with an appraisal that is “subject to” the repairs being made. Equity lines don’t consider the value of your home when the repair is finished (only CURRENT value), 203k renovation loans do.
3. 203K loans are first lien mortgage products. You only have ONE loan! Gone are the days of making two mortgage payments. One payment goes to one lender.
4. Moving to a different home that needs repair? Good luck getting a first mortgage let alone a second to renovate. Lenders of traditional loans will not lend on homes in disrepair, but 203K renovation lenders are not concerned with the current condition of the property. Renovation lenders are only concerned with the after repair condition of the property.
5. Thinking of putting the renovation amount on your credit cards? Consider that a 203k loan has a lower interest rate, longer repayment period AND tax advantage?

In this market there is no better loan than the FHA 203K renovation loan if you are looking to spruce up your current digs (or looking to purchase that foreclosure down the street with no appliances). One loan based on after repair value at an affordable fixed rate. FHA 203K loans were built for this market. You can get up to 95% of the current value of your home and up to $35,000 in repairs ($31,500 plus 10% contingency) with the Streamline 203k refinance. You can get up to 96.5% of the purchase price plus the repairs up to $31,500 plus contingency. Sounds complicated, then call me. Let me help you with the process. *NOTE: This loan will not work for foundation repair or landscaping. Manufactured homes are OK as long as foundation and tie downs are installed prior to inspection.

Step two in this process, partnering with a Realtor will be covered in tomorrow’s post. Please check back, because I think that, if you are interested in buying your family home from the supply of foreclosures, this will be some interesting information. Of course, since I am writing it, I could be a bit prejudiced.