Realtors can use the PURCHASE RENOVATION LOAN for:
1. The property is damaged and the underwriter requires the repair to be completed BEFORE the loan can fund! The seller doesn’t want to pay for it and the
Buyer doesn’t want to fix a home they do not live in yet.. The RENOVATION loan allows the “fix” AFTER the loan closes.
2. The buyer loves the house but hates the kitchen. They do not have the money to buy the home then renovate the kitchen later. let your client know they can include the new kitchen in the RENOVATION Purchase Loan. One Loan- One payment! Don’t let this objection prevent you from writing the offer!
3. Homeowners tell you they want to Sell BUT think they should hold off on the listing until they spend some money on the place for cosmetic changes. How much money will they spend? Will their costs be returned through a higher price? What if the Buyers would prefer to select their own colors and materials? If they list the house for the amount less than what they would spend, the new buyers can get a Renovation Loan AND get the colors and materials they want! Don’t let the listing be delayed!
4. Your buyer wants to purchase a Manufactured Home on acreage BUT is does not have a permanent foundation. Renovation Loans can be used to install the foundation AFTER the loan closes.
5. The Buyer loves the neighborhood and the school district but the home needs another bedroom. Solution.. Renovation Loan.
6. The Buyer had their heart set on a pool and the home they want does not have a pool. Conventional Renovation Loans allow for Luxury items such as pools and spas.
7. Your Buyer is an investor and wants to be able to fix the purchase and then sell the home or rent it. Solution- Conventional Renovation Loan.
8. First Time Homebuyer wants to purchase but has little down payment and the home they like will need appliances.. Solution: FHA Renovation Loan.
FHA 203K Program Highlights
As America’s housing stock ages, there is a need to improve, update, and enhance the existing homes. The 203k section of the FHA Act gives homebuyers that ability!
the 203K Loan is an FHA Loan with a construction component.
The 203k Streamline Loan allows for repairs up to $35,000 without the need for FHA Consultants.
203K Standard allows for any amount of renovation up to the FHA limits for the county in which the property is located.
Purchase: Single Family Owner Occ- 96.5 LTV- 640 Mid Credit Score
Manufactured Homes 96.5 LTV – 640 Mid Credit Score
2-4 Units Owner Occupied 96.5 LTV- 640 Mid Credit Score
Benefits include; loan being based on sales price plus the rehab costs or 110% of the “after completed” value.
And the Realtor is paid their commission at the time of close not AFTER the work is completed.
Single appraisal, Single Application, 4-9 months to complete the work!!!