Buy it, Fix it!
With over a decade of experience in construction loans, we can guide you through the process of turning that almost perfect house into the dream home you and your family deserve. Borrowers who are happy with the FHA 203k rehabilitation loan we helped them get are more important to us than anything else. Our goal is to make the rehabilitation process as simple and worry-free as possible. We pride ourselves in offering the highest level of customer service, and appreciate the opportunity to earn your business. Whether you want to purchase a home and update it, add square footage, or make your current home into the home you always knew it could be, our purpose is to satisfy your needs. By placing you and your needs first, we assure you a pleasurable transaction.
The process of obtaining a rehabilitation mortgage is not much different form a regular mortgage, with a few extra steps. Upon your decision to proceed with a rehabilitation mortgage, you will meet with a consultant to…
1) Review the necessary steps to bring the property up to the local building code.
2) Add your “wish list” items. These items are may include anything from an upgrade in quality of materials to additional square footage. Pools and other similar luxury items are not allowed.
3) Establish a contingency reserve. This reserve is established for any unforeseen work that is required to complete the project. This reserve is between 10% and 20% of the work write up. If this reserve is not used, it is applied to the principle balance of your loan at the completion of the work.
4) Property appraisal order. The appraiser establishes an as is value, as well as a completed value.
5) Apply for a Mortgage. You can qualify for a mortgage up to 96.5% of the as completed value for purchases and up to 97.75% of the as completed value on refinances. Your income, assets and credit profile must support your total loan amount.
6) Close on your mortgage. Your loan is then underwritten and you will proceed towards closing like any other mortgage. As soon as your loan closes and the construction may begin.
7) Construction begins (Approved Contractor). The construction money is held in escrow and released in draws approved by the consultant. Your contractor must be licensed and insured and be able to prove he or she can start the job with no money upfront. As the job progresses, the contractor is paid in draws with a 10% holdback to insure full completion of the job.
8) Completion of the job. Once the final approval is given from the municipality, the contractor is paid the hold back (10%) and you enjoy your home.