203 k realtor ppt1

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?

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.

Why will the 203K Rehab Loan will be a crucial product for your business in 2011?

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.

How many times have you had a buyer client wanting specific items that were hard to find?

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!

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.

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

Standard 203K Product

No Limit on repairsMinimum repairs $5000.00HUD Consultant write up requiredStructural Repairs AllowedContingency Reserve requiredPayments can be financed (up to 6 months)No luxury items Contractor can take up to 5 drawsUp to 4 unit multi family

Streamline 203K Product

Up to $35000 in repairs allowed ( to include fees associated with repair costs)No minimum repair thresholdNo luxury itemsNo structural repairs allowedNo FHA consultant requiredCan be used for refinance primary residenceUp to 4 unit multifamilyContractor can take a maximum of 2 draws

Before After

Before After

Before After

Before After

Before After

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!

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.

What are the extra costs involved with the loan?

Contingency reserve: 10 % to 20 % of repair costs.

Title update fees

Inspection fees

Supplemental Origination1.5% of repair costs or $350.00 (whichever is greater)

Consultant fee. ( If applicable)

How long does the process take?

At New American Mortgage the average turn time for a 203K loan is 9–20 days!

How do we do it?

Easy…every loan has the same CTC date.

What’s a CTC date? …..Clear to Close…….