Micah,

The EEM is not allowed on Streamlines.

Micah,

Yes, the Streamline is 35,000 and mentioned here due to the fact that the Full rehab is a bit more complex. Once you cross the $35000k threshold it get's a little bit stickier to accomplish. Many investors are still wetting their appetites on the Streamline to make sure that the full REHAB 203k will be a good business practice.

As for the EEM, I am not sure but now that you bring that up - I will find out and return with the answer.

I believe that the $35,000 is for the streamline loan right Justin? Maybe lenders are not doing non-streamline these days. But I think that if it is coupled with an EEM (energy efficient something or other) you can get up to another $8,000 for energy efficient appliances (including furnace, A/C, stove, fridge, dish washer, etc...) right?

Micah Olson
Keller Williams South Valley
801-805-4900

Make sure that your lender is ok with the sellers giving you money at closing. Many lenders will not allow that any more. There are loans that allow construction and renovation. An FHA 203k streamline is a great example. I think that Justin Coleman has posted here. I believe that he does a good job at them. I also know of a few other lenders that do them.

In the past buyers would ask for "seller repair credits" and use the money as their down payment. Banks are very cautious these days. The way that I have gotten it done, without using a 203k, or construction loan, is to have the money paid to a contractor through escrow. That way you are not getting it. But some banks even have a problem with that. Find a good lender, get their commitment (not opinion) to do the loan BEFORE you are locked into the purchase.

Micah Olson
Keller Williams Real Estate
801-805-4900

That it a brutal management fee for sure!!! We sell Direct to Wells so this must be a retail strategy to ensure they are making a bit more dough on these files. They are a little bit more documentation heavy, but not enough to justify those kinds of fees.

I believe bank of America and Wells Fargo charge management fees / verification fees which drive a typical closing from less than 2000.00 to 3000-3500? Or they offset it with a higher than market interest rate? I see that you are in Utah, maybe the lenders in that area have a better handle on the situation than those in my area. My lenders act like a 203k is a max cap product.

Scott,

I am not sure where the higher fees come from - I charge the exact same as I would for a regular FHA.

It is true that doing work yourself or earning sweat equity is allowed, but money does not flow through a contractor. A Licensed contractor must perform the work and get paid through draws just like a construction loan.

As for other alternatives - it depends on your particular situation.

Great answers so far and I agree a 203k loan is needed if repairs are extensive. I word of caution, fees associated with a 203 k loan can be rather high and generally speaking you are not allowed to do the work yourself, the money has to flow through a licensed general contractor. With that being said if you are looking for an amount under 10,000 for repairs I would investigate other financing alternatives.

I would negotiate a price that you and your agent feel is fair market value for the property. I would then use the FHA 203k loan to bring the property up to date.

Some items to keep in mind are:

Although there is no minimum cost of REHAB - The maximum cost of REHAB is $35000.00
REHAB Must begin within 30 days of closing and must be completed within 75 days
You must still have a 3.5% down payment investment in the property

Items that may not be included in the rehab - You may not do anything major structurally like relocation of a load bearing wall or adding a room and of course no luxury items such as pool or saunas.

This is actually a great program but needs a professional to do it properly - if you would like more information, please feel free to reach out to me:

Justin Coleman
Security National Mortgage
NMLS#283650
justin@justin-coleman.com http://www.snmc.com/justincoleman

Hi there, you may be able to get a seller's concession towards closing costs, but however the funds flow it must be accountable and trackable on the HUD closing statement. In my area, I am finding that banks are requiring that credits coming out of the inspection negotiation be reflected as a reduction in sale price on the HUD.

My recommendation is this - only buy the house if you can afford it. And that includes having an adequate reserve/cushion to handle maintenance of the house and whatever else life may throw your way.

Good luck to you!
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results

Scott,

By not acknowledging the actual value of the property with your offer you could be inviting other problems. When financing the lender will request an appraisal to insure the price of the home is an accurate reflection of the current local real estate market. In the event the home is priced above the appraisal value, your lender will not finance your transaction.

With this said, over paying may appear to be a soultion, but in the long run it could result in another set of problems. Our recommendation is to initially set your sights going to contract at a price that can be supported by an appraisal.

Additionally, a standard purchase agreement should have repair limits built into it that may cover some of the repairs needed. Speak with your realtor about the property value and making certain repair limits are included in your purchase offer. In this manner problems identified through your home inspection can be repaired prior to closing.

Hope this is helpful,

Bill

A seller is not allowed to give you money outside of closing for any purpose. You have a few options. You can try for a FHA 203k loan as stated in the other answer. If you don't qualify for that you can ask the seller to make the repairs prior to closing.
What type of financing were you planning on getting? If you get an FHA loan the home has to meet certain standards. If those are not met the FHA appraiser will require repairs to be compeleded on the property prior to closing. These repairs are typically completed by the seller.
If you are using a realtor to buy the home hopefully that realtor had you sign a FHA loan addendum. On this addendum you will tell the seller they are responsible for any FHA repairs up to a certain amount. If you are buying a HUD home they can sometimes hold money in an escrow account (it will be financed) for repairs to be completed after closing.
If you are not working with a realtor or have any additional questions let me know.
Thanks
Jaren Larsen
801-599-7945
Jaren@redstoneresidential.com

You might want to speak with a lender about the FHA 203k loan program is the Department's primary program for the rehabilitation and repair of single family properties. Basically a home improvement loan. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, the Department believes that FHA 203k loan is an important program and they intend to continue to strongly support the program and the lenders that participate in it
view the link below for more info.