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FHA 203(k) Streamline

Thursday, March 4th, 2010

In the real estate market today there are a number of bank owned properties available for purchase at great prices, in “as is” condition. “As is” can mean the house is an ugly duckling or it can mean that it has been stripped to the studs and raccoons have taken up residence. As a potential buyer, purchasing a bank owned home can be a great opportunity to invest in a fixer and earn sweat equity. The problem is, in order to get a mortgage to buy the house it can’t have any ‘health or safety’ deficiencies. Some typical health & safety issues would be: missing carpet, holes in walls, missing plumbing or electrical fixtures, broken windows, water leaks, mold, doors that won’t lock; raccoons or other pests etc. Beauty is in the eye of the beholder, but adequate heat, plumbing, electrical, roof are absolutely required for financing.

I’ve had a number of buyers tell me that they would be willing to do the work on the house prior to closing on the loan. Unfortunately, I have yet to encounter a selling bank that will allow it. There is a willing buyer, a willing seller but no financing…catch 22.

The FHA 203(k) Streamline loan is ideal for this situation in that it allows borrower to close on the home before the improvements are made. Repairs and improvements up to $35,000 are financed into the loan. Borrower is required to make a 3.5% down payment based on the price of the house plus repair costs. Funds from the loan are disbursed by the bank to the contractor based on FHA guidelines as the work is completed after closing.
I won’t tell you this is a quick and easy loan, but if you follow your Loan Officer’s instructions and do exactly as they advise you along the way it will be worth the extra effort to get the house you want.

A few things you should keep in mind:
*Generally self help is not allowed (can’t do the work yourself)
*House must be for owner occupancy (not for rentals or house flips)
*NOT only for first time buyers!
*NOT just for purchase, you can use this for refinance too which I’ll talk about another time
*not just for required repairs…you can do this for cosmetic upgrades only: new appliances, remodel a bathroom or kitchen, paint, etc.

My comments are intended to give you an idea of how a FHA 203(k) Streamline may be used. A Loan Officer who is experienced in FHA 203(k) financing will be a great resource to give you more specific product guidelines.

Good luck!!!

www.rosemarykendall.com

Posted in Buying a Home, FHA Financing, Ramblings, Vendors | 1 Response »

Taking a Sunday Drive? Please Join us at our Open House today 1pm to 4pm

Sunday, February 28th, 2010

Today we will be in Rochester holding our listing at 5420 189th. Ln SW open. If you are in the area please stop in and take a look at this very nicely maintained home.

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For more information on 5420 189th. Ln SW Rochester, WA 98579 follow this link.

Posted in Buying a Home, Open House | No Responses »

McKinley Hill Neighborhood in Tacoma One of the Best Old House Neighborhoods in 2010

Tuesday, February 23rd, 2010

Looks like we’re getting some more national press here in Tacoma. This Old House magazine selected the McKinley Hill neighborhood as one of the best neighborhoods in the country if you’re looking to buy an older home. For those of us who live here this is not news but it is exciting to see that Tacoma is once again in the national media spotlight for something positive. We are linking to the article so you can see what This Old House Magazine has to say about the McKinley district.

The McKinley Hill area has a lot of great older working class homes that are quite affordable for both first time home buyers and single income buyers. Additionally the McKinley area has easy access to downtown Tacoma and I-5 for those that have to commute to Seattle.
If you’re looking to buy a home and you want a bit more information on the McKinley area you can search our articles here on Classic Homes Northwest.

Of interest to many will be that the McKinley area qualifies for the Tacoma Down payment assistance program funds. Buyers may qualify for assistance with their down payment if they meet the income qualifications. Many homes that are for sale in the McKinley district are priced within reach of the guidelines of the Tacoma Down payment assistance program.

If you’re looking for a classic home in Tacoma you should consider the McKinley District. Please feel free to use our home search right here on Classic Homes Northwest to look at all of the homes that are for sale in Tacoma and the McKinley District. If you would like additional information on any of the homes you see please contact us and we will get right back to you with the information you are asking for.

Posted in Buying a Home, Ramblings, Tacoma | No Responses »

Today Super Bowl Sunday is Really the Start of the Real Estate Season in Tacoma!

Sunday, February 7th, 2010

This is a little known fact. The Sunday of the Super Bowl is traditionally the start of the real estate buying and selling season in and around Tacoma. If you were to look at the statistics for the month of February you would see the beginning of a trend upward each year. I am betting (afterall, today is Super Bowl Sunday) that as soon as the game is over many people who are thinking about buying or selling a home will start their searches to find the perfect home or the perfect Realtor®

No matter who wins today (we are rooting for the Saints) you know that starting tonight the real estate websites will see a uptick in traffic. What does this mean you you the reader?

Buyers: There will be more competition for homes in the price range you are looking for. You will need to have a game plan in place to help insure that you are finding the homes you want to look at as quickly as possible. Think of this as the no huddle offense for home buyers. We can help you with this. You can search all the listings of homes for sale in and around Tacoma by using our home search right here on Classic Homes Northwest. You can also send us a message simply by filling in the form on the sidebar on the right of the page. This will notify us immediately that you are wanting more information. Just tell us what you want and we will make sure to get it to you.

Sellers: More and more buyers will be looking at homes. Will yours be one of them? Without the right exposure your home could be overlooked like a bad Superbowl ad. If you are thinking about selling you should contact us and schedule a meeting to go over how we market homes and what we could do to help you sell your home as quickly as possible. Since more and more buyers will be looking for homes to buy you must realize that more homes will be coming on the market. You need to capture those eyeballs early.

We hope you enjoy the game today and that when you are ready for real estate season here in Tacoma that you will visit us often. Classic Homes Northwest is looking forward to finishing the 2010 Real Estate Season at the top of the standings. We promise no more Football references….. Baseball references will abound but no more Football. Call us today to get the ball rolling on your home purchase or sale in Tacoma. You can reach us at (253) 353-2194

Posted in Buying a Home, Ramblings, Selling a Home | No Responses »

Will This Be a Wet Blanket For People Wanting to Buy a Home in Tacoma? (and elsewhere too)

Wednesday, January 20th, 2010

We have been hearing that FHA would be updating their requirements to guarantee home loans. Today they have published the following press release. The changes will impact many potential home buyers who were marginally qualified previously. Tonight we will just post the press release. Over the next couple of days we will expand on how the changes will impact both potential home buyers and current home sellers.

FHA Announces Policy Changes to Address Risk and Strengthen Finances
New Measures Will Help FHA Better Manage Risk, While Maintaining Support for the Housing Market and Access for Underserved Communities
WASHINGTON – Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities. The changes announced today are the latest in a series of changes Stevens has enacted in order to better position the FHA to manage its risk while continuing to support the nation’s housing market recovery.
The FHA will propose to take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce seller concessions to three percent, from six percent; and implement a series of significant measures aimed at increasing lender enforcement. U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January.
“Striking the right balance between managing the FHA’s risk, continuing to provide access to underserved communities, and supporting the nation’s economic recovery is critically important,” said Commissioner Stevens. “When combined with the risk management measures announced in September of last year, these changes are among the most significant steps to address risk in the agency’s history. Additionally, by continuing to provide affordable, responsible mortgage products, FHA will support the housing market’s recovery. Importantly, FHA will remain the largest source of home purchase financing for underserved communities.”
Announced FHA Policy Changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending
* The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
* If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
* This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
* The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

2. Update the combination of FICO scores and down payments for new borrowers.
* New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
* This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
* This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

3. Reduce allowable seller concessions from 6% to 3%
* The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
* This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

4. Increase enforcement on FHA lenders
* Publicly report lender performance rankings to complement currently available Neighborhood Watch data – Will be available on the HUD website on February 1.
o This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
* Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
o Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
o This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
* Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
o Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
* HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
o Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
o Legislative authority permitting HUD maximum flexibility to establish separate “areas” for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

Posted in FHA Financing, Ramblings, Selling a Home | 1 Response »

Healthy Home Tips & Green Alternatives for New Homeowners in Tacoma Washington

Tuesday, January 19th, 2010

Click to enlarge image

For anyone who is considering buying a home that was built before 1980 this information can be of great value. I would recommend that you bookmark this post and refer to it often during your home buying process. For more information on Asbestos you should visit the Mesothelioma Cancer Centers website. The site has an abundance of information on Asbestos and what you should do if you have been exposed to it or if you are concerned about minimizing the risks of it. The following information is courtesy of the Mesothelioma Cancer Center.

Please click the image to the left to see a larger version.

Healthy Home Tips & Green Alternatives for Homeowners

The home buying process is an exciting time, but one that may bring additional responsibilities into your life. Many homes may need renovations or inspections, especially in areas that are susceptible to natural disasters. Having the assistance of an experienced and honest real estate agent will make this process smooth and stress free.

Some older homes may still contain obsolete building materials. Citizens of this great state are striving to move to a green lifestyle, advocating environmentally sustainable methods to be used throughout the state. Building or remodeling your homes with eco-friendly materials can lower utility and water bills, higher real estate value, purer air quality, reduced waste sent to landfills and conservation of natural resources.

Asbestos + Healthy Tips

Asbestos is a fibrous mineral that was used in construction applications for the greater part of the 20^th century. Often appearing as insulation, piping, roofing and flooring, homes and buildings could still contain asbestos materials if they were built prior to 1980.

If you locate any suspected asbestos in the home, most experts suggest leaving it un-disturbed until a home inspector can examine your property, take evaluations and determine the safest course of action. Sometimes the best action is no action at all. Disturbing asbestos in good condition may cause its fibers to be released into the air. The removal of asbestos must be undertaken by a professional abatement contractor who is trained in handling dangerous materials.

Exposure to this material can lead to the development of mesothelioma, a lung ailment associated with asbestos exposure. Though a cure does not exist, mesothelioma treatment options such as radiation, chemotherapy and surgery may be available to patients to battle the disease. Mesothelioma compensation has become tough to predict for victims and their families because diagnosis can take 20-50 years. For this reason, many people refer to it as a silent killer.

Removal of asbestos in public facilities, workplaces and homes should be performed by licensed abatement contractors as long as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) are not violated. They must wear protective equipment such as masks and gloves to avoid any exposure. The materials should be removed in as large pieces as possible and places in disposable bags.

Green Building Benefits

Each and every human being would like clean air to breathe and crisp water to drink. It takes a lot of effort and political advocacy to achieve this on a macro level. The implementation of eco-construction, green energy solutions will play an important role in the transformation to a healthier and sustainable world. Many locations throughout Alabama are swiftly changing their construction practices to suit the environment and the health of human beings.

There are many green, eco-friendly materials that replace the need for asbestos and can reduce energy costs annually. These include the use of cotton fiber, lcynene foam and cellulose. Cotton fiber is quickly becoming a favorite for home builders and renovators. Made from recycled batted material, it is also treated to be fireproof. Research has demonstrated that the use of eco-friendly insulation alternatives can reduce annual energy costs by 25 percent.

Implementing green methods of building can have positive environmental, health and economic benefits. These include: Conservation of natural resources, enhancement of air quality, energy sustainability, increase property value, improve quality of life, improvement of pulmonary/cardiac health and reduction of waste.