December 2010

Chicago FHA 203K Rehab Mortgage – Do You Have Remodeling Plans for the Coming Year?

When people think of the Chicago area FHA 203k renovation loan, it is usually as a way to buy a home that needs extensive repairs and finance the improvements into the mortgage. This is a great use for the loan, but one of the best kept secrets is that this loan can be used for people who own their home and want to make improvements or additions. You can use the Chicago area FHA 203k mortgage to refinance the home and do anything from updating a kitchen or bath to adding an addition. This is an especially useful idea for the many homeowners who are feeling stuck because of the real estate market and would move if they had the opportunity. If you are cramped for space or just want to add a little new life to your old digs, the Chicago area FHA 203k renovation loan could be the…

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Chicago FHA 203k – What Are the Steps to Close an FHA 203k Mortgage?

FHA 203k renovation loans are one of the best kept secrets in the market today. When I say that, it’s not because no one has ever heard of them, most Realtors know about the Chicago FHA 203k mortgage, and so do many builders. But it is still a secret because too many people hear about them and think they aren’t a real option. They have heard horror stories about how difficult these loans are or how the Chicago FHA 203k renovation loan is available, but they never close. I have one word in response to this. Baloney. The Chicago area FHA 203k renovation loan is a great mortgage program and the only way to buy many homes on the market now. a lot of these horror stories are true, but it isn’t because the loan is the problem, it is because too often, no one involved in getting the mortgage…

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Chicago FHA 203k Mortgages – What is the Difference Between a Streamline and a Consultant FHA 203k Renovation Loan?

There are two types of Chicago FHA 203k mortgages, the Streamline 203k and the Consultant 203k. The Streamline FHA 203k has been the most popular version in recent years because it is a great solution for smaller jobs, and the approval process is designed to be quick and, as the name says, streamlined. Streamline FHA 203ks are available for up to $35,000 in total costs, which includes the repairs and renovations plus a contingency reserve. It is amazing how much work can be done with $35,000. This is enough to remodel a kitchen, fix up a basement, in some cases both can be done for this budget. The Streamline FHA 203k is a very flexible loan, and your biggest limit is your imagination with what you can do. You can’t use the Streamline FHA 203k for structural problems, though. These can only be done as Consultant loans. The Chicago Consultant…

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What Kind of Work Can You Do With an FHA 203k Rehab Mortgage? Chicago, Illinois FHA 203k

The Chicago FHA 203k renovation loan is a very flexible mortgage and can be used for a variety of different situations. This program is getting more and more popular as a solution for buying foreclosures and other homes that have been neglected and need repairs and remodeling. Some homes need a minimal amount of work, while others may need close to a gut rehab. The great thing about the Chicago FHA 203k mortgage is that the loan fits either situation. It can be used as a streamline Chicago FHA 203k renovation loan (up to $35,000 total repairs, including a contingent reserve, with no structural work allowed) which is a great solution for most situations and you might be surprised at how much you can get done with this limit. Or, you can use the full consultant Chicago FHA 203k for the bigger jobs. In the Chicago are this mortgage can…

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Chicago, IL, FHA 203k Renovation Mortgages – Are these Only For Low Down Payment Home Buyers?

Most people look at the Chicago FHA 203K rehab loan as a way to buy and fix up a property when you don’t have much money. But this isn’t the only way to use this loan. Many home buyers with larger down payments can still benefit from using the Chicago FHA 203k renovation loan because it is cheaper than a conventional renovation loan, and it is often the only way to finance a property. I am working with a buyer now who is buying a home for about $400,000, using $100,000 of his own funds for the down payment, and then using the Chicago FHA 203k to pay for the rest of the purchase price along with $100,000 of needed repairs. That means he will finance a total of about $400,000, but when he is done, the property will be worth much more. So the question is, why would he…

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Chicago FHA 203k Mortgage – a great Solution for a Home With Mold

You are looking at homes for sale and you’ve just stopped by a nice house in a great neighborhood. This is one of those too good to be true houses, the price is the lowest in the neighborhood, and from the outside it looks like a beauty. But as soon as you step through the door you smell it. Maybe you remember the smell from an old relative’s home, or from staying in a musty cabin some summer years before. It’s a smell that is ingrained in our primitive brains, an acrid, unpleasant smell. Mold. Once you smell it, the common reaction is to head right back out the door. Mold is linked to all sorts of health problems, and you can’t imagine living even for a day in a home. But if you can look beyond the obvious problems, this may be an opportunity. Mold is one of the…

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Chicago FHA 203k Renovation Loan – 5 Great Reasons for Buying a Home With An FHA 203k

It may be the only way to buy a foreclosed home or a home with substantial repairs needed. With most loans, if a home has any property issues which are considered heal or safety problems, these would need to be fixed before you would be able to close. With the FHA 203k you just include those items in the list of repairs in your contractors bid. You can buy an ugly duckling home that shows poorly and is undervalued because of this, and turn it into a finished gem by using an FHA 203k. In effect, you are buying a home at wholesale and adding value at a reduced cost. By looking at homes which are not move in ready, or need substantial work, you are eliminating competition from other buyers. Most home buyers don’t have imagination and are only looking at homes as they are now, not what they…

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Chicago FHA 203K – Questions and Answers on How to Use the FHA 203K Renovation Loan

These questions and answers are taken directly from the HUD website. They cover some frequently asked questions. I’ve added my own comments in some cases. Down the road I will add my own version of a Q and A with some of the questions that I get asked most often. The questions I hear most often are usually process related, more of how the program works, and what specifically can be done with the loan. Does the rehabilitation construction have to comply with HUD’s Minimum Property Standards? Yes. The improvements must comply with HUD’s Minimum Property Standards (24 CFR 200.926d and/or HUD Handbook 4905.1) and all local codes and ordinances. The appraiser will note any required repairs. In a normal FHA loan the appraiser required repairs need to be completed prior to closing. With an FHA 203K the repairs can be added into the contractor’s estimate and finished after closing….

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