"I had all but given up on a planned room addition. Then I found Greg when interviewing for the HUD Consultant position. All I can say is "Wow, what a difference he made". He was creative, sensible, and very solution-oriented. Now I have my room addition, but 100% due to Greg's input. What a great guy, and now he's a good friend as well". Rich M. Spring Valley, CA
Properties that require the following work items are not eligible for financing under the Streamlined (k):
Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall; New construction (including room additions);Repair of structural damage;Repairs requiring detailed drawings or architectural exhibits;Landscaping or similar site amenity improvements;Any repair or improvement requiring a work schedule longer than six (6) months; orRehabilitation activities that require more than two (2) payments per specialized contractor;Necessitate a “consultant” to develop a “Specification of Repairs/Work Write-Up”;Require plans or architectural exhibits;Require a plan reviewer; Require more than six months to complete;Result in work not starting within 30 days after loan closing; or Cause the mortgagor to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted. (FHA anticipates that, in a typical case, the mortgagor would be able to occupy the property after mortgage loan closing). Mixed Use properties - You can renovate a mixed use property provided the commercial space represents less than one floor of the structure. The commercial uses cannot affect the health and safety of the occupants
There is a minimum requirement of $5,000 in eligible (necessary) improvements on the subject property. Improvements to a detached garage, a new detached garage, or the addition of an attached unit (if allowed by local zoning ordinances) can also be included in this first $5,000. * The look a likes have no minimum amount of rehab. ** Read this carefully - this minimum has been removed... there is no minimum amount of rehab now...2008
The mortgage must include one or more of the items listed below:
1. Any one to four unit properties which have been completed (with a certificate of occupancy) for at least one year are acceptable according to the provisions of local zoning requirements.
2. Homes that have been demolished or razed as a part of the rehabilitation process can be rehabbed as long as the existing foundation system is not affected and remains in tact. (as long as there is a portion of the original foundation)
3. A home can be moved onto a foundation on the mortgaged property, provided the proceeds from the sale of the previous location are not released until the foundation is properly inspected and the home is satisfactorily attached to the new foundation.
4. Any property the buyer wishes to convert either from single family into a two-four family property (if zoning will allow the change) or from a two to four family dwelling into a single family unit. Let’s take this one a little farther - You can take a 5-8 plex and turn it into a 1-4 unit. i.e..... Make an 8 plex into a fourplex and use this program.
5. A manufactured home that was built AFTER June 15, 1976, and has been on a permanent foundation for over one year is eligible, provided the unit must have been delivered to the site when it was new, prior to being occupied.
6. A 203k can be used on a "mixed use residential property” provided it meets the following requirements:
The floor space used for commercial purposes does not exceed...
25% for a one story building
33% for a three story building
49% for a two-story building
Investors can purchase SFRs with 20% down on the purchase price plus the rehab amount. This gives you a loan amount up to 95% of the after improved loan amount. Find a buyer that has the 5% down payment and qualifies with the lender...close the home with a one time assumable loan and get your funds released from escrow. No additional appraisal is needed. This is the FNMA "Home Style" loan and the old "escrow commitment procedure" works on it.