203k Feasibility Study In Long Beach California (Video)

Fred Sweezer Sr. is a HUD certified 203K Renovation Consultant. Providing 203K Reports to lenders and consumers to establish both the HUD minimum property standards as well as allowable elective items for appraisal and underwriting purposes.
We also perform a feasibility study to help consumers determine both if a 203K project is feasible and practical and help the consumer determine what has to be done minimally as well as identify and focus in various elective construction items to help determine the overall costs of both the minimum requirements and their elective choices.

Fred Sweezer Sr.


Skype Me™!

A Gift From the Government

FHA 203k Loan
If you’re looking at a fixer-upper, the Federal Housing Administration rehab loan may be the mortgage for you.
Are you interested in buying a fixer-upper, but don’t have the cash to remodel it? Or maybe you have saved money for remodeling and you’ve found a house you love, but your lender won’t allow you to buy it because the house isn’t considered habitable without toilets.

There are always properties on the market that weren’t maintained by cash-strapped former owners, were treated poorly by renters or were deliberately trashed by formers owners before they lost their home to foreclosure. Shouldn’t there be a way for someone like you to fix up these neighborhood eyesores and bring them back to life?

A Gift From the Government
There is, and it’s brought to you by the federal government. The Federal Housing Administration’s rehab loan product, the The FHA 203(k) Loan was designed for individuals who want to rehabilitate or repair a damaged home so they can live in it as their primary residence. These loans are endorsed by the government to encourage lenders to offer what would otherwise be considered a risky loan product. Because of the risk and expense involved, rehab projects are normally handled by professional real estate investors who can buy properties with cash and therefore don’t need any bank to approve the property’s condition.
According to the FHA, “All persons who can make the monthly mortgage payments are eligible to apply” for a 203(k) loan. To find a lender in your area who is experienced with FHA 203(k) mortgages, use the search tool at http://www.hud.gov/ll/code/llslcrit.cfmand check the box for 203(k).

You might be surprised by the variety of home repairs and improvements that can be financed with the 203(k) loan. These include, but are not limited to:
Room additions
Site grading and drainage
Bathroom remodeling
Kitchen remodeling, including appliances
Finishing an attic or basement
Structural alterations and repairs
Adding or decreasing the number of units in a dwelling (e.g., single family to duplex)
New siding
Second story addition
Elimination of lead-based paint problems
Heating, ventilation and air conditioning systems (HVAC)
Energy conservation
Disabled access
The FHA does not allow “luxury items” such as tennis courts, swimming pools, hot tubs and barbecue pits to be financed with a 203(k) loan, but some items that you might think of as luxuries, such as whirlpool bathtubs, are actually allowed. Talk to your lender about the specific improvements you want to make to see what you can finance.

Fred Sweezer Sr. is a 203K Consultant

Structuring An Offer With A 203k Loan

Skype Me™!

OK, I’ve heard many reasons why a Realtor or REO lender won’t accept a 203k loan contract offer.  How do we combat this?  We have a qualified homebuyer but their choice of financing is an issue.  The main roadblocks are that the loan takes too long to fund, and that Realtors have heard nightmares about past attempted 203k loan fundings.

These are both valid issues.  As far as taking too long, if put together correctly from the start, an additional 7 business days should not be enough to kill a deal.  Heresay from another fellow Realtor should not keep you from accepting a 203k contract offer either.  Have we heard nightmares about BofA, Wells Fargo, Chase and Citi and how they are on their normal conventional loans?  Absolutely.  The 203k loan is no different.  Draw upon your own experiences on this loan on whether or not it’s a viable loan.  Give it a chance.

Making an offer to buy a home using a 203k loan, whether it’s the 203k Streamline loan, or the 203k Standard loan, needs to be done differently than an offer to purchase using a conventional loan.

Here’s a few tips on how to present an offer using the 203k Standard loan.  1.  Submit a copy of an inspection report or a feasibility report prepared by a certified HUD 203k  Consultant.  2.  Include a detailed scope of work and repair estimate prepared by your 203k loan HUD Consultant.  3.  Get an Automated Underwriting Approval for an FHA 203k loan.   4.  Submit an offer with comps to support your offer.

Submit the above four items listed above along with your purchase contract, which should also specify you are using an FHA 203k loan for financing.  This should demonstrate that you have done your homework and due diligence, and that there is no guessing on your part on how this loan works.

In regards to item one above, submitting an inspection report/feasibility report, in my opinion is key.  Getting this done up front takes away the guess work when buying an as-is property.  Could you submit your offer with an inspection contingency and not pay for the inspection upfront?  Sure.  But if it’s evident that the property needs work, usually your main competition is going to be investors buying cash.  Your offer should be better than a low ball cash offer, so spending the extra upfront money on the upfront inspection/feasibility report via the HUD Consultant would be worthwhile.

It’s also possible that if you lose out on your offer, the HUD Consultant may not charge you for your next home inspection if you lost out on your previous offer.  There may be room for negotiation there, and the  HUD Consultant for their intial home inspection/ feasibility report, charges about the same for their fee as a normal home inspector and they are highly qualified and understand the 203k loan nuances and know if the property will fit the 203k loan specifications which in general are pretty broad.  A normal home inspector can not do this, they look for different things than the HUD Consultant even though their jobs are similar.

Using people familiar with the 203k loan process is vital and that goes for contractors as well, but I’ll save that commentary for my next post.  This isn’t the only way to submit a 2o3k loan contract offer, but it’s a start in the right direction to show both the lender and listing Realtor you mean business and understand the process and hopefully they do some research on their own to understand this is a viable loan option that is only growing in popularity and needs to be accepted by all involved in the real estate process.

Call Fred Sweezer Sr.