(Home Equity Lines of Credit) SO…What’s the deal?
How to purchase a home with renovation money – brought to you by Regional Home Mortgage LLC Holly Damales
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.
Housing Opportunities Made Equal of Virginia, Inc. (HOME) is a 501(c)(3) nonprofit corporation organized under the laws of the Commonwealth of Virginia and a HUD-approved housing counseling agency.
Housing Opportunities Made Equal was founded in 1971 to fight discrimination in housing access.
Housing Virginia has created a table of diverse affordable housing perspectives and sectors from across the Commonwealth. Top achievers in all of their fields, the Board and Staff share the common belief that true partnership begins with the ability to share ideas, create consensus and work together. Housing Virginia models every day the approach shared leadership that can make a difference at the community level.
On September 30, the cost of a mortgage could rise significantly. If this happens, many of your clients run the risk of being priced out of the American Dream of home ownership. Even worse, this could hold back the housing recovery.
We need you to share your market expertise with Congress. Well-qualified buyers don’t need another hurdle to access affordable mortgage financing.
Thank you to Regional Home Mortgage consultants Charlotte Hauck and Connie Clyburn who presented this month at our business meeting and gave some great tips!
Quick FHA Condo Updates
1. Delinquent HOmeowners Association Dues – if 15% or more of the unit owners in a condominium community are more than 30 days past due, FHA will not finance a mortgage. The 15% includes all units (occupied, investor, bank-owned, vacant)
2. FHA Concentration – FHA will not insure any mortgages in an approved project if 50% or more of the units are FHA-insured. FHA will display the concentration information for each approved condomimium project on the approved condominium listing, which can be found on the public website at : https://entp.hud.gov/inadapp/html/condlook.cfm.
3. Owner-Occupancy Requirements – at least 50% of the units of a project must be owner occupied. This must be verified by the property management company.
4. HO-6 “Walls-in” Interior Insurance – borrowers must obtain an HO-6 “walls-in” interior insurance policy to cover the replacement of interior items. These policies are mandatory and must be escrowed.
But basically that is why we work with experienced mortgage consultants who know their programs and what can get approved. So for the most updated information contact regarding FHA approved condominiums contact Charlotte Hauck (757) 407-9100 or Connie Clyburn (757) 286-4359
And then we had a nice lunch catered by Abuelo’s.
Here is a website that will help you determine if a property is located in a flood zone.
1. Open website
2. Enter the address
3. Press “Search”
4. Press “Flood Risk”
**Be sure to open each drop box to make sure you have ALL the pertinent information.
Flood Zones are as follows:
A – Requires flood insurance
AE – Requires flood insurance
B – Flood insurance is not mandatory
C – Flood insurance is not mandatory
X – Flood insurance is not mandatory
We partner with Regional Home Mortgage (a division of Monarch Mortgage) and if you have a mortgage question we would love to be able to refer you to our in house team of mortgage experts.
In our Virginia Beach office we have David Erman ( a mortgage professional since 1991 and a valid real estate license since 1991) and Holly Damales (a mortgage professional since 1986 and has had a valid real estate license for 31 years) who have years of experience to help you through the transaction.
Their office is located at 401 N Great Neck Road, Virginia Beach Va 23454 (757) 961-9090