hud/203k seminar june 16, 2015 at the cascades

You might want to consider 203(k) financing if…. there are walls missing

…. flooring issues

…. things aren’t where they should be

…. things just don’t fit

…. there have been modifications

Benefits of submitting bids on HUD Homes with FHA 203(k)

financing

• On equal footing with cash offers, because bids are awarded to the highest net

• Priority given to Owner Occupants• Bid on nearly all the inventory not just

insured properties• Safety net if there are high dollar appraisal

call outs

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Financing types

● IN (Insurable) – Qualifies for FHA 203(b) financing and do not have Minimum Property Requirements (MPR) repairs, may qualify for 203(k) financing, a rehabilitation loan for owner occupants only

● IE (Insurable with Escrow) – Qualifies for FHA 203(b) with Repair Escrow, and has MPR repairs of $5,000 or less (plus 10% margin). Repair escrow is buyer’s financial responsibility, added to the FHA loan, is never a credit to the buyer, and does not apply if 203(b) financing is not available and utilized

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Financing Types (cont…)

●UI (Uninsurable) – these properties do not qualify for FHA 203(b) financing. Typically, these properties have MPR repairs exceeding $5,000 or may not meet other guidelines for FHA financing

●UK (Uninsurable, 203(k) Eligible) – these properties do not qualify for FHA 203(b) financing, but may qualify for 203(k) or 203(k) streamline financing

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FHA 203(k) Renovation Financing

GeneralOverview

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Property &

Appraisal

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Streamline 203(k)

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Full 203(k)

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Questions?

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FHA 203(k) in Action

Standard Sales

VA Owned

HECM

HUD Homes

REOShort Sales


REO

44726 Shadowcrest DRLancaster CA 93536

MLS 15006982

$189,900

3+2 / 1,294 sf

Listed by Joy Colvin at Berkshire Hathaway Troth, Realtors


Short Sale

37677 Dixie DrivePalmdale CA 93550

MLS 1500623

$199,000

3+3 / 1,737 sf

Listed by Yvonne Hayes at Century 21 Doug Anderson


HECM

43411 Buena Vista WayLancaster CA 93536

MLS 1502825

$273,000

3+2 / 2,237 sf

Listed by Jared Erfle at Select Service Realty


HUD Home

40518 16th ST WPalmdale CA 93551

MLS 15006983

$236,000

3+2 / 1,350 sf

Under Contract with 203(k) Financing


HUD Home

38550 Lemsford AvePalmdale CA 93550

MLS 15005991

$111,000

3+2 / 1,141 sf

Under Contract with 203(k) Financing


HUD Home

2522 Avenue J14Lancaster CA 93535

MLS 1500556

$155,000

4+2 / 1,502 sf

Recently SOLD with 203(k) Financing

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Who is an owner occupant?

●Buyer purchasing property as primary residence for at least 12 months after close of escrow

●And has not purchased a HUD Home as an owner occupant within the past 24 months

Closing Period

30 days for Investor purchasers regardless of financing type, or for Cash purchasers

30 days for Cash/hard money purchases, regardless of purchaser type

45 days for Owner Occupants using 203(b), 203(b) repair, or conventional financing

60 days for Owner Occupants using 203(k) financing

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HUD Extension Policy

●15-day increments only● If sale fails to close for any reason, the extension fee is

forfeited, even if a portion or all of the earnest money is refunded

Gross Sales Price Fee per day Extension Fee

$24,999 or less $10 $150

$25,000 to $49,999 $15 $225

$50,000 or more $25 $375

The lines for down payment amount, mortgage amount, months, and repair escrow amount should be left blank.

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Line 4: If purchaser is applying for 203(k) financing, the following boxes should be checked:

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Questions?

hud/203k seminar june 16, 2015 at the cascades

Real Estate