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Mortgage Loan for Harvey damaged homes

1,971 Views | 10 Replies | Last: 6 yr ago by SteveBott
SteveBott
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AG
FYI a new FHA program is coming out to help repair damaged homes. It is FHA 203(h) Mortgages for Disaster Victims.

It provides up to 100% financing of the home and repairs. It has some pretty nice features but as always for these loans they can get complicated in the approval process. But it is at least an option. I will update when I get more info
dubi
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SteveBott said:

FYI a new FHA program is coming out to help repair damaged homes. It is FHA 203(h) Mortgages for Disaster Victims.

It provides up to 100% financing of the home and repairs. It has some pretty nice features but as always for these loans they can get complicated in the approval process. But it is at least an option. I will update when I get more info
So there will be the original mortgage then this new one for the flood repairs? Double payments?
SteveBott
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dubi best I can see so far this will be like a renovation loan. You take the existing mortgage, if any, and add the costs to repair/cure the home and get an appraiser to give a "subject to completion" future estimated value.

Combine all that and they loan 100% on those numbers.

So..

existing loan 160K
repairs at 40K
future appraised value is 200K
Loan at 200K with 40K in escrow hold back with the lender to be paid to the contractors
dubi
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What if you owe $175k on a $200k house.

Make $50k in repairs then you owe $225k on a $200k house.

Just repairing doesn't add value necessarily.
SteveBott
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dubi it goes without saying that this loan will not meet the desired goals of many borrowers. They never do. Each file is unique and my job is to place the transaction in the correct and best loan program. It will be an option for a lot of people especially since they will go down to 500 credit score which means the borrower is practically dead.
gig em 02
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dubi said:

What if you owe $175k on a $200k house.

Make $50k in repairs then you owe $225k on a $200k house.

Just repairing doesn't add value necessarily.


Bank would rather risk a $225,000 loan on a $200,000 house than spend the next two years trying to foreclose a $175,000 loan on a $125,000 house (that will be completely filled with mold by the time the dust settles)?
SteveBott
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Lenders do not think that way. If they can't sell the loan to someone they are not doing the loan with some exceptions such as high worth borrowers who they can make money on with other services. Those are not FHA borrowers.

But with dubi example what if FEMA offers to stack at 25k loan on top? Not sure that works or a good deal for the borrowers but it's possible
KC_Ag14
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The minimum credit score we've been told at my lending firm is 600. SteveBott, does it differ from lender to lender?
SteveBott
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Yes very much so. Most of my FHA lenders are 600 to 620 minimum but this one we have specializes in Fha loans and are way out front on scores.

Their normal 500 score loan is 10% down though.
KC_Ag14
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10-4. I'll be reading up more on the loan guidelines this afternoon so we have those conditions as well. Thanks for the clarification.
Ducks4brkfast
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This sounds pretty attractive.

What type of rate are we looking at?

I may hold onto the insurance money and borrow if the rates are low enough.
SteveBott
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I'll check
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