Foreclosed Property | NC FHA Expert

What Improvements Can You Make with a FHA 203K Loan For?

March 2, 2009 By Eleanor Leave a Comment

renovate homes! FHA has a great program to help with renovating a new home! It’s called the 203K program - and if you’ve been on Craigslist, you’ve definately seen, “this property is eligable for FHA 203k loan!”

It’s a great program for making up to $35,000 of improvements to the home. Many time, foreclosed property has what Realtors refer to as “Deferred Maintenance.” This means that people who could not afford to make their house payment – also could not afford to have the termite / wood rot repaired, or the stove fixed, or the carpet replaced… So this loan is PERFECT for those kinds of updates!

What items can you update – and which ones can you NOT do with this loan? Here are some basic guidelines:

Eligible Improvements/Work

Repair/Replacement of roofs, gutters and downspouts
Repair/Replacement/upgrade of existing HVAC systems
Repair/Replacement/upgrade of plumbing and electrical systems
Repair/Replacement of flooring
Minor Remodeling, such as kitchens, which does not involve structural repairs
Painting, both exterior and interior
Weatherization, including storm windows and doors, insulation, weather
stripping, etc.
Purchase and installation of appliances, including free-standing ranges,
refrigerators, washers/dryers, dishwashers and microwave ovens
Accessibility improvements for persons with disabilities
Repair/Replace/add exterior decks, patios, porches
Basement finishing and remodeling, which does not involve structural repairs
Basement waterproofing, including mold removal
Window and door replacements and exterior wall re-siding
Septic system and/or well repair or replacement
Connection to public water or sewage system

Ineligible Improvements/Work

Major rehabilitation or major remodeling, such as the relocation of a wall
New construction (including room additions)
Repair of structural damage
Repairs requiring detailed drawings, plans or architectural exhibits
Landscaping or similar site amenity improvements, including fence
Lead-based paint stabilization or abatement of lead-based paint hazards
Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) draws/payments.
Any work requiring a plan reviewer
Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the mortgage closing.

REMEMBER! If you are a First Time HomeBuyer, you might qualify for a $8000 tax credit (that you don’t have to pay back!)! Click Here for more details!

Many loan officers do not offer this program, and are not familiar with the process. Please call Steve and Eleanor Thorne, Connect With Us on Facebook in Cary, NC for details! 919-649-5058

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FHA 203K Loans in NC

February 16, 2009 By Eleanor 2 Comments

FHA 203K loans are perfect for those of us who fall in love with a great The Green Shag has to GO! house that has this Gosh Awful Shag Carpet! This carpet would give you a headache! How can you buy the house if you don’t have an extra $5000 to update that 1970′s carpet, green countertops, and linoleum? If the property is under the FHA loan limit in your county, you can purchase it with a FHA 203K loan.

Let’s say you negotiate a sales price of $100,000. With a traditional FHA mortgage loan, you would need to put 3.5% of the $100,000 into the downpayment. With this special FHA mortgage program, designed for REHABS, you can add up to $35,000 for “updates.” This means that if you negotiate a price of $100,000 and you need an additional $5000 for the updates… we base the 3.5% downpayment on $105,000!

It’s a GREAT program for folks who need to update a property! The main things to remember are:

You can add a minimum of $5000 to the purchase price for improvements, including appliances.
You can not change the “footprint” of the house.
You can not borrow more than $35,000 for improvements.
The property must appraise for the improvements plus the purchase price, or “after improvement” value.
Qualifying is the same as with traditional FHA loans, so you need to have at least 2 credit scores above 600.
The after improvement value can not exceed the maximum loan amount for your county.
The checks for improvement will be going directly to the entity doing the work, only in RARE occassions will this be the homebuyer.
Great loans for folks purchasing foreclosed property!
FHA is not a loan for Investors, with the exception of those purchasing a HUD foreclosed property – when HUD allows an FHA mortgage as part of the contract.

If you have questions about a 203K loan in NC, please contact Steve and Eleanor Thorne 919-649-5058. Connect With Us on Facebook or on Google Plus!

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Filed Under: FHA Mortgage Loans Tagged With: fha 203k loans, fha home loans cary, FHA LOANS, fha loans raleigh, FHA mortgage loan, fha mortgage loans, first time home buyer, foreclosed property, foreclosure, garner, home loan rates raleigh, HUD, mortgage, wake forest

FHA Loan Limits Change 1/1/09

November 10, 2008 By Eleanor 2 Comments

We're Not Kidding According to the Mortgagee Letter Published this week, HUD is changing the Maximum Loan Limit for Wake, Johnston, Franklin and Harnett Counties. The change is based upon our average sales price, which has dropped a bit per National Association of Realtors, on Page 48 of their 88 page report – the Triangle will be in for this change at the beginning of the year.

Because our median sales price is lower – our FHA loan limit will go to $271,050 on January 1, 2009. This means that at the end of the year, the maximum loan in Wake County, Franklin, Harnett or Johnston is $271,050 – down from the current maximum loan of $295,000. These calculations are based on the Housing Bill that passed Congress in August. Orange, Person and Durham Counties stay at their current limit of over $336,000!

UPDATE: In February of 2009 – the FHA raised the limits back to the $295,000 limit! Talk about CONFUSING!

The downpayment requirements for FHA also change at the end of the year, and if you’re buying that means you will be putting 3.5% starting on January 1st.

If you have questions about qualifying for a mortgage loan, or you want to check rates and see if we can beat what your loan officer is quoting you – call us!

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Filed Under: FHA Mortgage Loans Tagged With: FHA Programs, foreclosed property, johnston, loan limits, mortgage rates, mortgages, raleigh, wake

Special FHA Loan to Purchase Foreclosed Property

October 15, 2008 By Eleanor 10 Comments

buy foreclosed property FHA has an “old” program that’s being used in a “new” way!

The FHA 203K program is designed to help folks purchase homes that need a few repairs… and frankly, many properties that are purchased after a foreclosure, are perfect for this program.

Folks who lose their home in foreclosure generally did not have extra money to do some of the upkeep and repairs that needed to be done in the past few years. So you can get a “deal” on the home – but it really needs to be updated!

With the 203K program here’s what you can do:

Purchase home with 3% down (until the end of the year when it goes to 3.5%).
Make up to $35,000 in repairs.

So, if you purchase a home for $100,000 and it needs $20,000 worth of repairs… you would get a quote from the contractor (honestly does not have to be a licensed contractor), and we get an appraisal based upon the “future value.” Let’s say the appraiser agrees that you are going to have a property worth $120,000 once these repairs are done. We will base your loan on the $120,000 – the contractor gets $10,000 at closing (half of the repairs), and will get the remainder at the time they have it all finished.

No “Major” structural work can be done with this loan – so it’s not for adding a kitchen.

Have a few more questions? Give us a call!

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Filed Under: FHA Mortgage Loans Tagged With: fha home loans cary, fixxer upper loans, foreclosed property, home loan rates raleigh

Fannie Freddie Change and FHA/VA Loans

September 9, 2008 By Eleanor 1 Comment

The Paulson announced takeover of Government Sponsored Mortgage Giants Fannie Mae (FNMA) and Freddie Mac (FHLMC) created a welcome stability and confidence in both the mortgage market and the money markets as a whole. The key need was for foreign governments and hedge funds to begin purchasing mortgages again – something that had all but stopped in recent weeks.

These entities are too large, effect too many individuals, and would create too much havoc if allowed to bankrupt for the US government to let them fail. I am not a personal fan of bigger government, but in this case, I’ll shout a big ole’ hoorah. It is necessary for the stability of many levels of our economy.

Does the Fannie & Freddie bailout plan help or hurt FHA borrowers? Aren’t FHA loans insured by HUD? FHA Home Loans are insured by HUD, and are not directly associated with Fannie & Freddie. Ditto with VA.

However, many of these loans are sold through Fannie and Freddie into the marketplace… so knowing that this system will not be interrupted is important.

Also the market’s reaction to the bailout has reduced Interest Rates by nearly a half a percent across the board. Again, this could be because of more interest in buying and holding mortgage loans.

Lower rates mean lower payments… so if you are a homebuyer you will be able to afford a little bigger home! Yippee!!

If you have questions about purchasing a home in The Raleigh, Cary area please call Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058

FHA Loans are still more competitive and have lower overall costs than Conventional or conforming loans when purchasing a home with very little down payment (10% or less)

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Filed Under: First Time Home Buyer, VA Mortgage Loans Tagged With: fha home loans cary, FHA LOANS, fha mortgage loans, foreclosed property, home loan rates raleigh, mortgage rates cary, mortgages apex, VA Mortgage Loan, va mortgage loans

More Downpayment Needed for FHA

July 29, 2008 By Eleanor 6 Comments

downpayment got higher The New Housing Bill that Congress just passed in an effort to “save” Fannie Mae and Freddie Mac (F/F) has some other features that homebuyers need to be aware of.

SAVE UP! For more than 10 years there have been agencies that helped with downpayment. The downpayment was “gifted” through the agency – and it’s a bit complicated – but it meant that a homebuyer seeking FHA financing could get a 100% loan. Well, that’s been eliminated with the New Housing Bill.

ALSO – and this is the important part – the downpayment requirements for FHA financing just went to 3.5% effective October 1, 2008. There’s some question about how FHA is going to calculate that 3.5% – and as those details are available we’ll pass them on – but for the time being, assume that you will need 3.5%.

The seller can still pay your closing costs, and you are allowed to get a gift from a family member! Now is a GREAT time to buy! SO SAVE UP!

If you are interested in purchasing a home in Cary, or buying a home in Raleigh, please contact Steve and Eleanor Thorne with Connect With Us on Facebook, a Mortgage Banker in Cary, NC 919-649-5058

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Filed Under: FHA Mortgage Loans, Housing News Tagged With: cary mortgages, Down payment for FHA, fha downpayments, fha home loans cary, FHA LOANS, fha loans cary, fha loans raleigh, First Time Home Buyer, first time home buyer, first time homebuyers, foreclosed property, mortgages, mortgages apex, Raleigh Mortgage Loan Officer

Stated Income FHA Loans

July 14, 2008 By Eleanor 2 Comments

Can you just “state” your income at whatever you think would make it easier to qualify and get an FHA loan… no.

FHA requires documentation – and that might be why there’s no need for an FHA BAILOUT. In all seriousness, FHA is not a “publically” traded company like Bear Stearns or Fannie Mae or IndyMac – but still the point is that they have pretty strict guidelines.

Those guidelines state that if you want to borrow money that is insured by FHA – you need to document your income… and you will need enough income to qualify to make the payments on all of your obligations.

We’ve had at LEAST one borrower a week apply for a loan that was not legally seperated. This means they were still OBLIGATED on the note for the home they owned with their spouse – even though they are still living with that person.

They wanted to just “state” their income. That won’t work for an FHA loan. In NC you can no longer obtain a Stated Income loan. In other areas, you can still apply for a conventional loan with a SISA – you would need at least 25% down and a 720 credit score.

However, AGAIN – NC put the NC Predatory Lending Practices in place, and you can not get a stated income loan – it’s not that it’s no longer offered – it’s against the law.

If you have questions about purchasing a new home in Cary, NC- call Steve and Eleanor Thorne 919.649.5058

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Filed Under: FHA Mortgage Loans Tagged With: cary nc, divorce and credit, FHA LOANS, FICO and divorce, foreclosed property, foreclosure, mortgages, stated income loans in nc

Mobile Home or Modular

June 30, 2008 By Eleanor 3 Comments

The term Mobile Home is not “politically correct” since the folks that make them ( and I guess the industry) refer to them as MANUFACTURED HOUSING… but still, I’m from NC, and I grew up callin’ ‘em Mobile Homes – so I hope I don’t offend anyone in this discussion.

We’ve had several folks come to us seeking financing for a a Mobile Home / Manufactured Home that said they had problems at other lenders… not because the borrower had credit or income problems… but because the folks they were talking to didn’t want to finance a mobile home.

In the credit crunch of the last year – mobile home financing has taken a direct hit. Lenders who “use” to do those loans – stopped. But there are still financing options available! Here’s the “real” trick. Do you know what “sort” of manufactured property you own?

Sounds like a simple question – and I guess in truth it is – but what you’re looking for is a sticker. The home should have a HUD sticker (normally near the fuse box or under the sink) OR it will have a NC “Plate” in the same area. The “Plate” means that your home is a MODULAR home – and you can get just about any kind of financing you want! The STICKER means you have a mobile home – and you can get financing – but in today’s market you’re probably looking at an FHA loan.

FHA guidelines require an inspection of the foundation – modular home financing does not. Other FHA “perks” include:

•· Low Down Payment of 3% and 100% financing options available.

•· 95% of Appraised Value Cash-Out Refinance

•· FHA Streamline Refinance

•· NO Income Maximum Limits

•· Gift Funds: 3% down payment can come from FRIEND, FAMILY MEMBER OR NON PROFIT

•· Seller CAN PAY UP TO 6% OF YOUR CLOSING COST!

•· Down Payment Assistance

•· NO Cash Reserves Required

•· Gap in Employment OK•· Self Employed 2 Yrs OK – 2nd job income with 12 month history considered

•· Permanent Alien OK

•· NO pre-payment penalty

Qualifying for a FHA loan is somewhat easier, because FHA allows us to consider “compensating factors.” They allow credit score down to 580, and they allow you to “build” credit if you don’t have enough for a score!

If you or your friends and family have questions about using FHA to purchase a mobile home, or a modular- and you think you meet the income and credit qualifications – call us! Steve and Eleanor Thorne, Connect With Us on Facebook, 919-649-5058

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Filed Under: FHA Mortgage Loans, USDA Home Loans Tagged With: FHA LOANS, FHA Programs, First Time Home Buyer, first time home buyer, first time homebuyers, foreclosed property, manufactured housing, mobile home loans, modular home loans, mortgage loans johnston county, mortgages, usda home loans

Purchasing FHA Foreclosures

June 16, 2008 By Eleanor 4 Comments

FHA is making a temporary move which will make it easier for folks who want to purchase FHA foreclosures. In a release last week HUD announced that it will temporarily waive a 90 day restriction it held on those selling HUD foreclosed property.

The restriction had been in place to reduce ”flips” a fraudulent practice that strips a home of its equity before being quickly resold at an inflated price. Under most circumstances, the resale is to an unsuspecting buyer, especially if that buyer is not represented by a licensed Realtor.

In their statement, HUD said:

“In an effort to stabilize declining home values in certain neighborhoods.. announced a temporary policy that will… allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.”

Hud further stated, “that many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.”

We normally recommend FHA 203k financinging for these properties! For more information – please follow this link. If you have questions about qualifying for one of these properties, please contact Steve and Eleanor Thorne at Connect With Us on Facebook in Raleigh, NC 919-649-5058

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Filed Under: FHA Mortgage Loans, Housing News Tagged With: fha 203k loans, fha cary, fha home loans cary, FHA LOANS, fha loans cary, fha loans raleigh, FHA Programs, First Time Home Buyer, first time home buyer, first time homebuyers, foreclosed property, foreclosure, mortgages, raleigh

VA Loan Co-Signors

May 20, 2008 By Eleanor 6 Comments

wedding VA mortgage loan guidelines recognize legally married spouses of qualified veterans as co-signors on VA loans. This means that we can include the spousal income to qualify for the loan, and that these loans can be fully guaranteed by the VA. Simply being engaged means that you can get pre-qualified with the spousal income, but the closing must take place after we have evidence of the marriage.

The VA mortgage loan guidelines also allow for more than one eligible veteran(s) to purchase a home. If a married couple with more than one eligible veteran is involved, VA divides the entitlement charge equally between them, if possible. If two unmarried eligable veterans purchase property together the same rules apply and these loans can be fully guaranteed by the VA.

While the VA guidelines may allow for a non-veteran to co-sign for a mortgage loan, they will not fully guarantee the loan, and in our 25 years of lending, we’ve never seen one of these loans close. Again, the VA mortgage loan was designed to offer long-term financing to American veterans or their surviving spouses (provided they do not remarry).

Although it seems more confusing than it is, the federal government does not generally make direct loans under the act. The government simply guarantees loans made by ordinary mortgage lenders (descriptions of which appear in subsequent sections) after veterans make their own arrangements for the loans through normal financial circles. The Veterans Administration then appraises the property in question and, if satisfied with the risk involved, guarantees the lender against loss of principal if the buyer defaults.

In the case of divorce, the Veterans Administration has several choices. If a non-eligable spouse continues to occupy the property and if the payments are made in a timely fashion, no change to the loan will be made. In this case, the military spouse will have their eligability for a mortgage re-instated once the loan is paid off and/or refinanced out of a VA loan. If payments are missed, and the property is approaching foreclosure, the VA might choose to refund the loan and have the payments made directly to the Veteran’s Administration.

For more information about purchasing a home in Raleigh with VA Financing or buying a home in Cary as a Veteran, please contact Steve and Eleanor Thorne with Connect With Us on Facebook in Cary, NC. 919-649-5058

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Filed Under: VA Mortgage Loans Tagged With: eligability va loan, eligibility for VA mortgage, First Time Home Buyer, first time home buyer, first time homebuyers, foreclosed property, mortgage, mortgage rates cary, raleigh, VA, va home loans, VA Loan Co-signors, va loans cary, va loans divorce, veterans

What Improvements Can You Make with a FHA 203K Loan For?

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FHA 203K Loans in NC

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FHA Loan Limits Change 1/1/09

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Special FHA Loan to Purchase Foreclosed Property

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Fannie Freddie Change and FHA/VA Loans

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More Downpayment Needed for FHA

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Stated Income FHA Loans

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Mobile Home or Modular

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Purchasing FHA Foreclosures

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VA Loan Co-Signors

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Does This Home Qualify For USDA?

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$8000 For DownPayment Available!

Does This Home Qualify For USDA?

We Can Help You Buy A House!

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steveATstevethorneonlineDOTcom 919-649-5058 mobile MLO NMLS #60596 Equal Housing Opportunity Lender

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