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203 k realtor ppt1
1.
2. Agenda:
To answer the following questions:
1) What is a 203K loan and how does it work?
2) Why do you need to know about 203K loans?
3) How will 203K Loans help you sell more houses?
3. How it Works:
FHA’s 203K program permits home buyers to finance
additional repairs into their mortgage to improve or upgrade
their home before move-in.
With this product, home buyers can quickly and easily tap
into cash to pay for property repairs or improvements, such as
those identified by a home inspector or FHA appraiser.
4. Why will the 203K Rehab Loan will be a crucial
product for your business in 2011?
5. 1.2 Million Foreclosures predicted nationally for 2011.
Hampton Roads could see as much as 40% of available listings
foreclosures in 2011
Banks sell properties As/Is,
Government loans ( FHA/VA – Little or No down payment)
more prevalent than conventional loans requiring 10% to 20 %
down payment.
6. How many times have you had a buyer client
wanting specific items that were hard to find?
7. 90 % of people who purchase a home repair or
remodel after they move in.
100% of people have those “projects” they never get
around to!
Using the 203K your buyers can complete their dream
projects BEFORE they move in!
When it is time to re-list, the home is already
updated!
8. Example:
FHA 30 Year Fixed
New Home Purchase: $200,000.00
Principal and Interest payment @ 4.75% $1145.00
Cost of Improvements: $25,000.00
Visa / Mastercard Payment : approximately $500.00 a month
Total: $1645.
9. Example:
FHA 203K
Sales Price $200,000.00
Cost of Improvements: $25,000.000
Loan Amount $227,741.00
Principal and Interest payment at 5.00%: $1244.00
Monthly savings: $401.00
10. Standard 203K Product
No Limit on repairs
Minimum repairs $5000.00
HUD Consultant write up required
Structural Repairs Allowed
Contingency Reserve required
Payments can be financed (up to 6 months)
No luxury items
Contractor can take up to 5 draws
Up to 4 unit multi family
11. Streamline 203K Product
Up to $35000 in repairs allowed ( to include fees
associated with repair costs)
No minimum repair threshold
No luxury items
No structural repairs allowed
No FHA consultant required
Can be used for refinance primary residence
Up to 4 unit multifamily
Contractor can take a maximum of 2 draws
17. What do I do if I think my client may need
a 203K loan?
Step 1.
Partner with the professionals at New
American Mortgage. Your 203K experts!
Step2.
Help your clients find their dream home!
18. FHA consultant provides a work write up.
( Not applicable to Streamline product.)
Contractor provides an itemized estimate of repairs
that should match the work write up.
Appraiser determines after improved value.
Maximum loan amount is 110% of after improved
value.
19. What are the extra costs involved with
the loan?
20. Contingency reserve: 10 % to 20
% of repair costs.
Title update fees
Inspection fees
Supplemental Origination
1.5% of repair costs or $350.00
(whichever is greater)
Consultant fee. ( If applicable)
21. How long does the process take?
At New American Mortgage the average turn
time for a 203K loan is 9–20 days!
