Jenelle Ferrer

Jenelle Ferrer
Your Realtor

Monday, September 12, 2011

What is a 203k Loan?

So let's start off answering what a 203k loan is: FHA offers a program called the 203k loan. It's a HUD rehab loan for home improvement, repairs and fix up. The FHA 203k loan is the perfect loan for fixing up your dream home. And right now...there's never been more homes for great prices ready to be fixed up and made into just that: your dream home!


Let's look at why it's a great time to use this loan that most Realtors don't talk about and most individuals don't know about:
 
1.      LOWEST MORTGAGE RATES IN 50 YEARS
2.      LOWEST HOME PRICES IN OVER 10 YEARS
3.      HIGHEST NUMBER OF FORECLOSURES AND SHORT SALE PROPERTIES IN HISTORY
4.      OVER 60% OF THE HOMES SOLD FOR THE PAST 12 MONTHS HAVE BEEN FORECLOSURES OR 
SHORT SALES
5.      OVER 50% OF THE FORECLOSURES OR SHORT SALES THAT ARE SOLD AND CLOSED MONTHLY ARE CASH DEALS
6.      LONGEST AMOUNT OF TIME THAT HOMES REMAIN ON THE MARKET …LEADING TO DEFERRED MAINTENANCE ISSUES LIKE LEAKING ROOFS, STOLEN APPLIANCES, GENERAL VANDALISM
7.      NO AVAILABILITY OF 2ND MORTGAGES FOR REPAIR/RENOVATION
8.      NO RENOVATION FINANCING AVAILABLE THROUGH CONVENTIONAL OUTLETS
9.      LOWEST AVERAGE CREDIT SCORES IN HISTORY
10.  BORROWERS HAVE LITTLE OR NO DOWNPAYMENT FUNDS DUE TO THE POOR ECONOMY
11.  TIGHTEST MORTGAGE QUALIFYING PARAMETERS IN THE LAST 10 YEARS
12.  SELLERS UNABLE OR UNWILLING TO MAKE REPAIRS SO HOMES ARE OFFERED IN “AS IS” STATUS
13.  HOMES THAT ARE IN GOOD SHAPE ARE RARE AND TYPICALLY HAVE MULTIPLE OFFERS ON THEM SO YOUR OFFERS ARE GETTING OUT BID <-- This is true and very frustrating for buyers
14.  FHA, VA, CONVENTIONAL AND USDA FINANCING CALL FOR THE HOME TO MEET MINIMUM PROPERTY STANDARDS AND WILL NOT LEND ON HOMES IN NEED OF REPAIR

If it's such a great program and it works than why aren't more people taking advantage of it?

  •  OVER 90% OF THE MORTGAGE LENDERS DO NOT OFFER THE FHA 203K
  • MOST OF THE MORTGAGE LENDERS THAT DO OFFER THE FHA 203K DO NOT KNOW HOW IT WORKS AND CAN NOT EFFECTIVELY TAKE A BUYER FROM CONTRACT TO CLOSING
  • OVER 95% OF THE REAL ESTATE AGENTS ARE EITHER NOT FAMILIAR WITH THE 203K PROGRAM OR HAVE HAD A BAD EXPERIENCE WITH IT AND DO NOT WANT TO USE IT.
  • MOST BUYERS HAVE NEVER HEARD OF THE 203K PRODUCT AND HAVE NO  IDEA THAT IT CAN HELP THEM ACHIEVE THEIR DREAM OF OWNING A HOME.
  • THERE HAS NEVER BEEN A SOURCE FOR REAL ESTATE AGENTS TO LEARN ABOUT THE PROGRAM AND HAVE THE CONFIDENCE IN THEMSELVES OR A MORTGAGE COMPANY TO PROPERLY HANDLE A 203K LOAN
Ask me about it. I've been trained on assisting my buyers on how to best use this as leverage for achieving their dream home!
Contact Me!

2 comments:

  1. Interesting and important information. It is really beneficial for us. Thanks

    ReplyDelete
  2. From my experience with 203k loans, the best advice is to use a lender that offers assistance via third party with 203k processing.
    This shortens the closing time by weeks. Try http://www.cfs-mortgage.com/203k for more information.

    ReplyDelete

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