While most FHA lenders look down on repair escrows and wanting to hold back money on loans the easy way around this is the FHA 203K rehab loan.  I am located in Mt. Laurel, NJ and recently my Realtors have been asking specifically for FHA 203K rehab loans because the banks are now requiring this as a condition to accepting an offer on bank owned properties, why? 

This is simple- most foreclosures have work that needs to be done in order to satisfy HUD/FHA minimum property requirements.  You cannot get around this with a typical FHA loan and the options are limited.  FHA 203K loans allow you to do both minor and major repairs on the property.  And get this- they allow you to go up to 110% of the appraised value of the property after rehabilitation. 

Who thought that 100% + financing was dead!  Its not and FHA will allow you to do this with only 3.5% down on purchase.   

If you are considering buying a foreclosure property or thinking you might like to rehab your current one contact me and I will be happy to run through with you your options using an FHA 203K loan.

FHA 203K loans are great for borrowers who are looking to refinance and also for purchases.  I wanted to use this blog, and the next few posts,  to show you examples of how you can use the fixer upper loan for certain situations. 

A customer of mine who has owned her home for the last 4 years decided to contact me about adding on some square footage.  See in her community there are many homes that have 2 levels and the average square footage was around 2,000 square feet.  When she came to me her home had 1,050 sq ft and only one bathroom.  She asked me for a solution and I explained to her how a FHA 203K rehab loan worked and how it could benefit her and her daughter.  Using this type of loan we were able to have a contractor put a bid in for $38,000 to double the square footage of her home and add on an additional bathroom.  She only had a rancher and now her home has a second floor and its has increased the value by almost $75,000. 

Yep, its amazing- by doubling the size of her home, adding on a bathroom, giving her a great interest rate (5.5%) and doing it all with a one close mortgage my borrower was able to transform her property and her way of life.  Its all becuase of the FHA 203K Rehab loan.  Email or call me to discuss how this FHA loan can help you to do the same. 

Jeff Onofrio – Village Home Mortgage – jonofrio@village-capital.com  Office- 609-217-9409

Today’s FHA 15 year fixed mortgage rate is 4.5% with 1/2 point and 5.0% with zero**

Today’s FHA 30 year fixed mortgage rate is 4.875% with 1 point and 5.0% with zero**

**Please remember with all of our daily rate updates every situation is different. We assume the following for this mortgage quote: 720 credit score, $200,000 loan amount

Please call Jeff Onofrio from Village Home Mortgage at 856-505-6717 to get your personalized quote today.

Go Phillies!

Today’s FHA 15 year fixed mortgage rate is 4.5% with 1 point and 5.0% with zero**

Today’s FHA 30 year fixed mortgage rate is 4.875% with 1 point and 5.125% with zero**

**Please remember with all of our daily rate updates every situation is different. We assume the following for this mortgage quote: 720 credit score, $200,000 loan amount

Please call Jeff Onofrio from Village Home Mortgage at 856-669-6522 to get your personalized quote today.

With foreclosures and short sales dominating the market place right now- more and more offers that customers are submitting to banks are coming back with two options.   The banks are saying you need to go conventional (As-Is) or FHA 203K rehab.   

The FHA 203K Rehab loan is usually the only option for first time home buyerssimply because the FHA 203K loan is the only one that offers the low down payment option.  All FHA loans regardless of type have a minimum down payment of 3.5%.  The question is- “Is the 203K Fixer Upper loan right for me?”.  The answer to that comes down to if you have the time and the desire to deal with a property that is going to require repairs.  When considering purchasing a property with a 203K loan remember that you are typically going o be getting a property at a discount because you will have to get the work done yourself. 

Finding a good lender who knows the FHA 203K Rehab loan is very important- make sure to find a FHA 203K lender and not a broker on these loans.  You want to make sure that the lender you select has the ability to underwrite these loans in house because brokering these loans takes the control away.  Please contact me and I will be happy to walk you through the process and help you decide if the FHA 203K is right for you. 

Jeff Onofrio- Village Home Mortgage- jonofrio@village-capital.com          Mobile- 609-217-9409

There are some important features to remember when looking into a FHA 203K Rehab loan.  These are great loans for buyers looking to purchase a foreclosure or short sale or for the home owner who wants to update or remodel there house.  Below are a few important things to remember:

• FHA loans are for primary residences only-  you cannot be an investor and try to get a FHA loan or a FHA 203K rehab loan.  This is really important- I cannot tell you how many calls we get from investors looking to utilize this program and or skirt the system.  FHA loans are for primary residences only!
• 2 types of FHA 203K loans-  you can go with a Full K or the FHA 203K Streamline.  I will explain these two loans in more detail in my next post.  But for now just remember that you can only get up to $35,000 with the FHA 203K streamline and the repairs must be cosmetic in nature, nothing structural. 
• Single close loan- unlike traditional construction lending you only have one closing with the FHA 203K loan.  No need for construction loans and then permanent financing with the FHA 203K rehab loan you get all of this in 1 single close solution
• Up to 4 unit properties- you can use the 203K loan to finance properties from 1 to 4 units for both purchases and refinances.
• Down payment as low as 3.5%- down payments are the same for a regular FHA program as they are or the 203K. 

FHA 203K rehab loans are a great alternative to second mortgages, home equity lines and construction financing.  Finding an FHA lender who specializes in 203K’s is very important.  You do not want to be dealing with someone who just started learning this program- you need a seasoned lender who underwrites these loans in house. 

Feel free to call me with any questions or if you would like to see if an FHA 203K rehab loan is right for you and your family.  You can reach me anytime at 609-217-9409 or via email at jonofrio@village-capital.com.

How often in life is something given away for free. Yes, many advertisements offer items for free, but when one reads the fine print or does further investigation, they quickly realize that nothing is truly being given away. Instead, the word free is just being used to offer incentives to the potential customer. The exception to this rule is the first time homebuyer tax credits being given away to those qualify for one of the federal government’s attempts to stimulate the housing market. While it is debatable whether the tax credit has been successful in its goals, there is little debate whether this program offers potential homebuyers an additional reason to purchase now.
I am here to tell you that time is running out on the FREE, yes the FREE money the United States government is allocating to those who qualify under the first time home buyer $8000 tax credit. While the deadline to close on a home in order to receive the $8000 tax credit is November 30, 2009, the time for those “sitting on the fence” to start the process is now. The average time for closings varies by lender but generally can be anywhere from 30-60 days, so that does not leave much time to get preapproved with a lender and get taken to see potential homes by a realtor. So if you have never owned a home or if you have not had ownership interest in a property in the last three years the time to ACT IS NOW!!! Why not let the government reimburse you next April for part of your down payment or closing costs? If you are someone that wants to purchase, but needs a co-signer to qualify for a mortgage, do not worry. As long as the home is your primary residence, you can still qualify for the tax credit. So my message to those who are still unsure; get out there and take advantage of both the falling home prices and the $8000 tax credit!

Until next time….

The amount of information requests regarding the current $8000 tax credit has been plentiful over the last few months. Today, a potential borrower brought to my attention a scenario that should certainly interest a certain sector of the population. The soon to be first-time buyer asked:
If I am a first-time home buyer and I get a cosigner that already owns a property to help me get approved for a loan, am I still eligible for the tax credit?
My initial thought was that this person would not qualify because of the co-borrower’s current status as a homeowner; however after some research and great help from the woman who asked the question, I was able to determine that indeed, this person is eligible for the full credit. While the co-borrower, is not eligible because they are not a first-time buyer, the borrower most certainly is eligible as long as the home will be that person’s primary residence.
So those of you out there, that may need help from parents or other blood relatives to qualify based on income, there is GREAT NEWS!!! Even with your relative on the loan, you still qualify for the $8000 tax credit. If this was me, I would be out looking at homes that are already reduced in price now to take advantage of this too good to be true offer from our federal government. These “gifts” from the IRS certainly do not occur often and today is the time to act.

Many potential first time home buyers find themselves in similar situations as we enter July 2009. They want to take advantage of the $8000 tax credit for first-time home buyers, purchase while the prices are declining, and know they can afford the payment of the new home. Only one thing stands in their way; cash. While their current rent payment may be just slightly lower than what their housing payment would be, the funds needed for down payment and closing costs are just not available to many people right now. So, how can you purchase a home if you have limited cash available?
1. Down payment funds- Ideally a customer should have the minimum down payment for an FHA loan of 3.5% before they consider buying a home, but there is one great option if this is not possible. A gift from a family member is that other possibility. FHA allows an outright gift of the down payment investment to come from someone with a clearly defined and documented interest in the borrower. This gives the potential borrower a second option for the down payment. Do not be afraid to talk with your family members and make them aware of all of the advantages of buying now, including that juicy $8000 credit. Perhaps they can assist you in getting in the housing market while the getting is good.
2. Closing costs- When you purchase a home, there are a number of costs other than the down payment associated with the lender and the Title Company, as well as reserves that need to be paid upfront. Not only can you use your own funds or gift funds as mentioned above, but you can also have the seller to pay for up to 6% of these costs in an FHA loan. For example, if there were $10,000 in costs associated with a $190,000 sales price, perhaps you can agree to pay $200,000 for the home and have the seller cover the closing costs. This in effect rolls the costs into your loan and the seller is still paid what they are looking for in the transaction. Even better yet, maybe you are in a position where you can just negotiate part or all of the costs with the seller without raising the sales price. Either way, this is a great option offered by FHA to assist potential home buyers.
The bottom line here is yes there are definitely costs associated with taking advantage of the $8000 tax credit and the declining housing market, BUT there are ways to work things so that you have as little as possible coming out of your own pocket in these trying economic times.

Many Americans find themselves in a similar position today. They have a mortgage payment that is either too high because of a loss in gross income or because their mortgage adjusted and thus their rate has increased. While some of these people have been able to refinance or purchase because they have maintained their credit, many others have seen their bills overwhelm them and thus have lowered their credit scores below the acceptable mark. What can one do to make things better for themselves financially?
1. The first thing to do is seek help from a credit specialist. I work directly with a company whom I connect applicants with poor credit to through a conference call. While credit specialists charge a small fee for their services, these fees are warranted by the results they achieve for their customers. If you refuse to try to fix your credit, then you have no one to blame but yourself. Credit specialists will work directly with the credit bureaus and will remove any erroneous credit issues or potentially some blemishes that are legitimate. They are experts in the field and can work much more efficiently towards improved scores than you and I can.
2. While your credit repair specialist is working on your credit report, you should be also looking to add positive lines of credit to your profile. This can be done by obtaining credit cards, possibly secured cards that are paid for upfront and are given to those with any credit score.
3. Making sure all your bills are paid on time. If you cannot pay a bill, do not simply ignore it. It will not go away. Call the company that you owe and try to work something out with them. Many others are in the same shoes and many companies are willing to work with you before they hit your report with blemishes. Simply put, people that ignore bills cannot expect to get mortgage approvals. Would you lend a large sum of money to someone that shows a history of not paying other bills?
4. Develop a relationship with an honest mortgage consultant that will answer your calls, return your calls in a timely fashion, and will have you ready to go once the credit specialist gets your scores up. Do not settle for a bank that does not return your calls and is of little help other than trying to earn your business once scores are up.
5. Get approved and close on your loan.
It may be intimidating or frustrating at first to tackle these issues, but trust me getting that credit fixed is the only option you have if you ever want a home loan. The qualification standards have been raised and there will never be loans given to those with poor credit again.
Contact me if I can be of assistance to you in anything mentioned above.