Posts Tagged ‘FHA 203k’

Fannie Mae HomeStyle rehab loan

May 19, 2010

I regularly receive requests for loan programs that will allow borrowers to make repairs on a home and roll those costs into the loan. Due to the financial crisis and the risky nature of these loan programs, conventional rehabilitation loans virtually disappeared.

The only consistent option was the FHA 203k program, which is a great loan program, but only allows cosmetic/non-structural repairs on a buyer’s primary residence. It would be great if there was a program that allowed both buyers and investors the flexibility needed to do more than just cosmetic repairs… and now there is!

Introducing the Fannie Mae HomeStyle loan program. This is a renovation program like the FHA 203k program, and they share some similar traits.

  • Both programs allow for cosmetic remodeling/repairs
  • The funds needed for the work on the property is rolled into the loan
  • Available on primary residences for purchases & refinances
  • Work must be completed by a licensed contractor

There are similarities, but definitely note the differences.

Fannie Mae HomeStyle:

  • Available for borrowers (10% minimum downpayment) and investors (20% minimum downpayment) on purchases and refinances
  • Structural repairs/changes/improvements allowed
  • Luxury items such as pools, hot-tubs, fences, etc. allowed
  • minimum repair amount of $5,000 required

FHA 203k:

  • only 3.5% down payment required
  • No minimum repair amount required
  • Available for primary residence purchases & refinances only
  • No structural repairs/upgrades OR luxury items allowed
Who can benefit from either of these loan programs? Anyone looking for a loan program that will allow you to knock out a wall or two OR investors looking for a way to cover remodeling costs OR even someone looking for a way to pay for carpet and paint in their new home.
If this is you, program options are now available! Don’t hesitate to contact me to learn more or get prequalified for either of these great programs.
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Little or no money down? No problem!

August 26, 2009

Gone (long gone in fact) are the days of easy 100% financing. Conventional loan programs using 80/20 combo loans or 100% financing with Private Mortgage Insurance are a thing of the past. In fact, the minimum down payment for a conventional loan in Georgia is now 10%.

Think about that figure for a minute. On a $250,000 loan, the minimum down payment is $25,000. While conventional loans do allow gift funds, many buyers do not have that much money available for a down payment (especially first time home buyers).

So… conventional loans require 10% down. That is good to know, but what about the borrowers who do not have that much for a down payment? I’m glad you asked! There are several programs available that require little or no down in order to buy a home.

  • FHA loans: FHA loans require only a 3.5% down payment along with lighter credit and cash reserve requirements.
  • FHA 203K Streamline: This program also requires a 3.5% down payment, but there are provisions allowing borrowers to finance an additional $5,000-$35,000 for non-structural repairs/updates to a home (new roof, carpet, paint, siding, remodel kitchen/bath, etc.)
  • $100 HUD Homes: Many foreclosed homes owned by HUD are available to buy with only a $100 down payment using an FHA loan. The offer must be at the property’s asking price, and if accepted, the down payment would only be $100.00!
  • VA loans: VA loans allow 100% financing. Traditionally, these loans are available to U.S. Veterans and their spouses. However, the VA Vendee program allows borrowers to purchase VA foreclosed homes using a VA loan regardless of their U.S. Veteran status.
  • USDA/Rural Development loans: USDA loans also allow up to 100% financing. Property eligibility is based its location. If a property lies outside of a metro-area, there is a chance it would be eligible. To know for sure, you can go here to check.

Even though the current lending environment is definitely not what it used to be, options remain for borrowers with little or no money down. While some of the loan programs depend on the property itself, a 3.5% down payment can get borrowers into most homes on the market. Feel free to contact me for more information on any of these loan programs.

It’s nice to know that even now, you don’t need to break the bank in order to own a home!

It’s nice to know that even now, you don’t need to break the bank in order to own a home!

Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.”  Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing.  For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.