Getting a Mortgage on a Foreclosure/Bank Owned Home – CAN IT BE DONE???

Getting a Mortgage on a Lehigh Valley Foreclosure/Bank Owned Home – Can it be done??

Yes!  All Day long…The question is what type of mortgage can you get?  That is the question.

When dealing with any type of large purchase you should make sure that you are working with experienced professionals all the way around.

Real Estate Sales – Is a sales business but you should weed through those fast talking sales type personalities…and look for a Real Estate agent that works more like a Real Estate Consultant instead.

This is one of the largest purchases a person makes in their life – I do not care how much you spend but next to buying a car and getting married this is the 3rd most expensive investments and just as stressful as the rest.  Interview and ask questions – make sure you know who you are working with before you make a written commitment to work with them.

Okay – So, what kind of loans can you get on a Bank Owned/Foreclosure? Well, It Depends!

Let’s talk about Residential Owner Occupied properties in this Blog.

It depends on what type of loan you are looking for: The best way to think about this is, How much do you have saved to buy a home? Are you looking to purchase a home with the least amount of money out of pocket? Do you want to avoid paying mortgage insurance?

1) I always ask my buyer’s are you looking for the least out of pocket type of loan? If so, then there are a few options.  There is the typical FHA loan and this is a loan for owner occupied properties – with this loan you only need 3.5% down and if the property you want to purchase has a bad roof or mold in the basement or even the cooper piping has been ripped out – you can get an FHA 203K Rehab loan and you will be set.

2) If you are looking for purchase a home anywhere above North of Coplay, west of Macungie, North East including Bath and above than the property may be eligable for USDA Rural Housing loan which is 100% financing. This means you do not have to put anything down to get the loan like with FHA you must put 3.5% down to get the loan.

3) If you have saved money for your purchase and/or you are selling a home and plan on putting a significant amount of money down on your purchase then you best bet is a conventional loan – There are less restrictions on this type of loan but depending on the condition of the property you still may need a renovation loan.

4) Are you a First Time Home Buyer? Do you find it difficult to save money and will you have less then $5000 in savings/checking but you can pay your monthly obligations on time and you currently live in Lehigh County and want to purchase a home in Lehigh County -Depending on your Family household monthly income, you could qualify for a special program through the Neighborhood Housing Services of the Lehigh Valley – They work with 2 local mortgage companies that will help you with a 2nd loan that will give you 5% down and 6% closing costs necessary to purchase a home.  If you keep the home for 5 years – this loan will be forgiven!! There are also programs for Northampton counties but no loans are forgiven there.

Sometimes – repairs needed are unknow until you have a professional home inspector out to the property you plan on purchasing – When you make an offer on a property you typically have a minimum of 7 to 10 days to conduct due diligence or inspections to make sure there isn’t anything about the property that you do not accept – an unknown material defect like Mold, Roof, defective Heating, plumbing systems etc.  Basically, anything that is going to cost over $2000.00 total to replace/repair.

Looking for More Details: Click here Lehigh Valley Down payment and Closing cost assistance programs.

Hope this Blog was helpfu.

FHA Renovation Loans – BEFORE & AFTER Photos of 203K Streamline & Standard Programs

FHA Renovation Loans – BEFORE & AFTER Photo’s of 203K Streamline & Standard Programs – Get a Visual of what you can do WITH your next home or even with a Refinance of your current home.

Renovation Finance Opportunities BEFORE & AFTER

The Buyer’s Concern:
“I wish the outside was as appealing as the inside”  with The FHA 203K Standard Program…

The Buyer Concern: “A Red Roof? A retaining Wall that is falling down, we need nice landscaping package with a brick walk way and front Lamp post…what about new windows and siding? OH YEAH! and please close in the wannabe sunroom and give me an office! Again FHA 203K Standard Program you can include Landscaping updates also.

The Buyer Concern: “Bright Blue siding? No Air conditioning, we need new windows with the grids, let’s tear down that old chain link fence and add a foyer enterence with coat closet, I would prefer Gray shutters not white, and OH YEAH! And that Tree needs to be pulled out..It is too big and hides our new home!



The Buyer Concern:
“Your Kidding!, Right? I have 5 daughters and this house only has 2 Bathrooms! With the 203K Streamline program..update Bathrooms and add a sit down vanity, ceramic flooring, and granite counter tops.



The Buyer Concern:
“OH MY GOD! A Blue Kitchen, Look at those cabinets! They are just like my grandmothers! The kitchen is the most important part of my home, I need a double wall oven, much much more counter top space, there is no lighting in here either…I need recessed lighting and the appliances MUST BE Stainless Steal of course OH YEAH! The flooring will need to be ceramic please…YOU GOT IT! with FHA 203k Streamline program.



What ever you can imagine you can do with that outdated, lacking maintenance, handyman special, foreclosed or short sale property….ALL you need to find is a great location, wonderful community, the school district you want to live in, within the commute to work you want…AND as long as the home in it’s AS IS condition PLUS the updates and repairs you want fit within your Pre-Approved Price range and the home will Appraise…YOU ARE GOOD TO GO!

What is FHA Renovation Financing “Rehab Loans” , How Does it Work & The Benefits?

What is Renovation Financing “Rehab Loans” & How Does it work? – What are the Benefits to the Lehigh Valley Home Buyer?

What is Renovation Financing?

  • It is financing will all the fixings
  • The money to purchase a home
  • The money to repair, upgrade or remodel
  • All in a single first mortgage transaction
  • FHA Programs Available – FHA 203K Streamline, FHA 203K Standard


How Does Renovation Financing Work?

  • Loan amounts are based upon AFTER IMPROVED property values
  • Estimates of repairs and/or other improvements are determined prior to closing
  • home purchase closes in AS IS condition
  • Home Buyers make improvements AFTER closing (4 to 6 months)
  • Renovation costs are spread throughout the mortgage term


What are the Benefits of Renovation Financing? for the Home Buyer “Borrower”

  • Choose a great lot or neighborhood and create their dream home.
  • Take advantage of market opportunities with “Handyman Specials”
  • Stay within certain school districts, but gain modern amenities
  • Make Energy Efficient Upgrades
  • Build Instant Equity

What Type of FHA Loans are Available for Renovation Financing? FHA 203K Streamline & Standard Loans

What type of FHA Loans are Available for Renovation Financing? FHA 203K Streamline and Standard Loans – Learn about the Basic program opportunities

Renovation Financing opportunities for FHA 203K Streamline Program – The quick and Easy (close within 60 days)

  • Owner Occupied ONLY! Sorry, No investor loans
  • For Purchase and Refinancing 1 to 4 Unit homes (including mixed use)
  • No minimum Repair amount – get as little as $1000.00 or as much as $30,000.00
  • 15 or 30 year fixed rates
  • Adjustable Rate Products available – Great benefits for Homeowners who are looking to move within 5 years
  • Foreclosure Sales
  • HUD Properties
  • Bank Owned Properties & REOs (Real Estate Owned)
  • Estate Sales
  • TLC – Handyman Specials
  • The Streamline K is a simplified verson of the full FHA 203K Standard
  • NO Structural, site or landscaping repairs or improvements permitted.
  • NO HUD consultant required – Just a Certified & Approved Contractor Estimate
  • Work must be completed within 4 months for less
  • Left over repair escrow must be used toward the principle of loan
  • Credit Score 600 to 620 minimum


Renovation Financing opportunities for FHA 203K Standard Program
– The Complete Package – Skies the Limit

  • Everything as the Streamline Program BUT More Paperwork, but MANY MORE OPTIONS
  • $5,000.00 minimum repair amount NO CAP – Property just needs to appraise at current market value
  • Greater fliexibility on repair amount or type of improvements which can be made.
  • Leftover repair escrow can be used for additional improvements
  • HUD Consultant required – fee sliding scale based upon amount of work being done
  • Work must be completed within 6 months or less.
  • If the home is not able to be lived in after settlement the home buyer can finance 3 or 4 months of mortgage payments in the loan until move in.

What is the Process for Getting an FHA 203K Renovation Loan? Let me walk you through it

What is the Process for getting an FHA 203K Renovation Loan? Find out the Basics for FHA 203K Streamline and FHA 203K Standard programs

When ever there is anything offered by the government it tends to be a bit confusing…so, I have dedicated my time to learn everything I can about this program plus develop relationships with the Renovation Mortgage Specialists in the Lehigh Valley so I can walk my Lehigh Valley Home Buyers through taking advantage of this opportunity available to them.


What a wonderful idea. Build a Loan Program  that will assist in building up our communities by renovating homes that are in need of maintenance AND repair- Foreclosures can be devistating to any community – NOW you can get a loan to help the home buyer to do the repairs they need that will help them have the home of their dreams and bring back the market value of the community where they are located at the same time.   WOW! NOW THIS WAS A GREAT IDEA!!


THE PROCESS SUMMARY

FHA 203K Streamline Loan Summary

1. Borrower obtains pre-approval
2. Borrower selects property with qualified Buyer Agent
3. Borrower identifies work to be done – qualified Buyer Agent will assist in this process.
4. Buyer Agent confirms that the property will appraise based on the AFTER Improvements Value
5. Borrower makes offer on the property in AS IS condition & estimates work to be done if possible – If the scope of the work can not be estimated – Then the offer should be written with a con
dition of a contractor estimate equal to a certain cap amount.
6. Borrower goes under contract
7. Selected Contractor (s) validated (contractor required to complete standard validation package) Written Estimate is completed.
8. Borrow makes mortgage application.
9. Final underwriting review
10. Loan closes
11. Work begins within 30 days of closing
12. Draw center releases  money to contractos with up to 2 draws per specialized contractor (up to 30% available for materials in first draw)
13. All work completed within 120 days of closing (4 months)

FHA 233K Standard Loan Summary

1. Borrower obtains pre-approval
2. Borrower selects property with Qualified Buyer Agent
3. Borrower identifies work to be done or contracts Feasibility Study with HUD consultant for $250.00 (applicable to total fee if proceed with transaction)
4. Borrower goes under contract and makes mortgage application
5. Initial credit review and commitment by underwriting
6. Selected contractor (s) validated (contractors required to complete standard validation package)
7. Borrower obtains work write up (“WWU”) for HUD consultant as well as written estimates from contractors for work to be done.
8. “Subject to” appraisal ordered once WWU and all estimates received.
9. Final underwriting review
10. Loan closes
11. Work begins within 30 days of closing

12. Draw center releases money to contractors per WWU schedule and after periodic inspections by HUD Consultant
13. All work completed within 180 days of closing (6 months)