How To Purchase A Home With Renovation Money

How to purchase a home with renovation money – brought to you by Regional Home Mortgage LLC Holly Damales

Rehab a home with HUD’s 203(k)

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.

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Flood Zone Determination

Here is a website that will help you determine if a property is located in a flood zone.

FreeFlood.net

 

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

 

 

 

 

 

 

 

 

 

 

Mortgage Questions?

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