DSHA FHA 203k Loan Program: Renovate Your Home with 5% Down Payment Assistance

Are you buying a home in Delaware that needs repairs or updates but short cash to close? The DSHA FHA 203k Limited Loan Program is a powerful mortgage option that allows you to finance both the purchase and renovation of a primary residence—with help from the Delaware State Housing Authority’s (DSHA) 5% down payment and closing cost assistance to make your home purchase more affordable.

This is a top option for first-time homebuyers in Delaware looking to purchase and renovate with one streamlined loan and get a 5% DPA Program. Find out if you qualify today by calling the John Thomas Team at 302-703-0727 or APPLY ONLINE. Keep Reading...

Delaware Home Renovation Loans – 3 Finance Options to Choose

John Thomas November 12, 2017 Tags: Fannie Mae HomeStyle Renovation, FHA 203k Loans, Renovation Loans

Delaware Home Renovation Loans – 3 Finance Options to Choose

Renovation loan programs come in all shapes and sizes. Whether you need a few repairs, paint touchups, major reconstruction or some luxury upgrades, the right renovation loan for your project is available. It’s crucial to find the renovation loan program that fits your needs the best. PRMI Renovation Loans offer three great financing options that are tailored to fit the needs of Delaware homeowners. Call 302-703-0727 to explore your options with a renovation specialist or begin the process online – GET STARTED ONLINE.

The three options for Delaware Renovation Loans are as follows: FHA Limited 203k Loan Program, FHA Standard 203k Loan Program, and the Fannie Mae HomeStyle Renovation Loan Program. Each option is explored below:

FHA LIMITED 203(k) PROGRAM

The FHA Limited 203(k) Program is an excellent choice for Delaware homeowners who need less than $35,000 to finance minor home repairs. That includes home repairs (or replacements) like plumbing, roofing, flooring, or insulation.

This FHA-insured mortgage program allows Delaware homebuyers to include an additional $35,000 into their mortgage. You can use that money to make limited upgrades and repairs to your home before you move in. Own a home already? Delaware homeowners can refinance an existing mortgage, adding up to $35,000 for renovations. This program is designed to help homeowners make repairs or upgrades to a variety of things, such as:

roofs
drainage and septic systems
HVAC systems
electrical systems
flooring
plumbing

This FHA program can also be used to buy and install appliances, repair things like decks, and paint.

FHA STANDARD 203(k) PROGRAM

The FHA Standard 203(k) Program is an excellent option if you need to finance major renovations or reconstruction. It’s also handy if you need additional financing for housing costs during the construction process.

The FHA Standard 203(k) program is designed to provide renovation financing for Delaware homes that require major renovations that go beyond what is covered by the Limited 203(k) program. This program covers everything from minor rehabs to complete and total tear-downs. A home is considered eligible as long as the foundation system remains in place. This means Delaware homeowners can finance improvements to the home’s function, elimination of health and safety standards, enhancing accessibility for a disabled person or major landscaping. To make things even better, a homeowner can finance up to six months of mortgage payments into the loan if they need to move out during the construction (this includes some restrictions).

FANNIE MAE HOMESTYLE RENOVATION PROGRAM

Delaware homeowners who want to finance luxury renovations not allowed under FHA guidelines will likely choose the Fannie Mae HomeStyle Renovation Loan. It’s also a critical choice if you’ll need additional financing for housing costs while their home is uninhabitable during the renovation process.

FHA programs provide for renovation projects that improve the home’s functionality and health and safety standards – however, they do not allow for luxury items like new swimming pools, detached garages or gazebos. The Fannie Mae Homestyle Renovation loan allows Delaware homeowners to finance these luxuries in addition to the standard renovations allowed by FHA. The Homestyle renovation loan is best suited to the conventional borrower and contains one application, one closing and one set of fees. You could potentially avoid mortgage insurance by paying 20% down. Borrowers can finance six months of mortgage payments if the house is uninhabitable during construction, similar to the FHA 203(k) Standard program.

The John Thomas Team Can Help You Choose

If you would like to get more information on a Delaware Home Renovation Loans, please call the John Thomas Team at 302-703-0727 or APPLY ONLINE

Renovations NOT Allowed on FHA 203k Loans

John Thomas February 24, 2016 Tags: Delaware FHA 203k Loan, FHA 203k Loan, FHA 203k Rehab Loan

What Repairs Can I NOT Do With a FHA 203k Loan?

FHA 203k program is flexible and allows a lot of leeway when it comes to the property you can buy and the repairs, renovations and upgrades you can complete as part of the loan.

You can finance everything from second story additions, to finished basements, new kitchens or that large master suite you always wanted.

There are, however, some repairs that you can not do as part of the 203k process. So, what are the improvements you absolutely can’t do with a 203k?

Outbuildings | Guesthouses | Non-Attached Structures

The property you want to purchase has a second structure; a rental cottage, pool house, guest house, detached converted garage, workshop or superlative storage shed. That structure is not in good condition and needs some work.

Sorry, but FHA 203k guidelines will not allow you to include any repairs to that structure as part of the loan.

You cannot renovate anything other than the primary structure on a FHA 203k loan, PERIOD. All the renovations must be permanently affixed to the primary structure – the main house.

This FHA 203k guideline can sometimes be a problem for approval. Especially if the outbuilding is in excessive disrepair.

There problem for many comes with the fact that, despite our inability to renovate, the secondary structure still needs to meet FHA collateral guidelines.

In other words, it can’t be a hazard or deemed a health and safety issue by the appraiser during his valuation process.

Depending on what state you dwell this can really be a deal killer as many homes in certain areas have a detached structure.

The kicker is we ARE allowed to do one thing IF the structure is deemed a “health and safety” issue – we can demolish it!

Swimming Pools | Hot Tubs | Spas

This one can also cause some consternation for buyers, especially those looking at foreclosures with a swimming pool. In all likelihood, that swimming pool is a mess. They tend to get that way with no upkeep.

Technically, FHA 203k guidelines allow for $1500 in pool repair on the standard 203k and NONE on the streamline K, but as of September 2015 the pool requirement has changed. You can now repair a pool on both the Limited 203k and the Consultant 203k.

That said, many lenders still don’t allow ANY pool repair at all even though FHA 203k guidelines now allow it.

Talk to a Renovation Loan Specialist

Cosmetic Landscaping

FHA 203k guidelines do not allow for cosmetic landscaping.

They will allow you to protect the collateral (the house) and address erosion or water drainage issues. A lot of the ability to do this type of repair is in the verbiage used in the contractor bid.

It can be a fine line between cosmetic landscaping and drainage/erosion issues in some cases. if worded correctly on the contractor bid and / or HUD consultant work write up, can encompass a LOT of potential repairs.

Furniture | Accessories | TV

It would be nice if you could finance that new living room set, California king bedroom suite, dining table or big screen tv right into your 203k loan. But you can’t, sorry. Same goes for those window blinds, not allowed either.

Kitchen appliances – stove, range, refrigerator, built-in microwave oven – those can be included in the loan. In some cases, like that of a stove/range, it may even be required to be included. FHA guidelines dictate that a home must have those built-in appliances to qualify.

Make sure your lender offers BOTH the =&0=&and the =&1=& (also known as the standard or full ) products as there are plenty of issues that can flip a streamline to a full 203K. There are also multiple repairs that are allowed on the standard 203k loan that are not on the streamline 203k.

Good renovation loan officers know what you can and can’t do. Be prepared, use a mortgage lender with knowledge of both products and give yourself the best chance for 203k success.

Call 302-703-0727 for questions about FHA 230k loans or to apply to be pre-approved. You can also apply online at www.PRMILoanApplication.com

FHA 203k Streamline Now the “Limited 203k”

John Thomas February 9, 2016 Tags: 203k Limited, Delaware FHA 203k Loan, FHA 203k, Limited 203k, Renovation Mortgage

FHA 203k Limited (Streamline 203k)

FHA has offered the 203k loan for decades. They introduced the FHA 203k streamline a little later, but it is certainly not a new mortgage product. Recently, the 203k streamline was retitled the – Limited 203k – despite the fact that the guidelines saw little change.

Despite that, most lenders execute the loan in a substandard fashion. It is simply not a priority and that is evidenced by their general lack of education displayed by their loan officers.

Unfortunately, much of the information online reflects that lack of training. It’s either outdated or ill-informed. In fact, you’ll be hard-pressed to find another mortgage loan product with as much poor and inaccurate information surrounding it than the 203k.

So, let’s set the record straight on the Limited 203k (or 203k streamline) and all renovation loan products. They are – top to bottom – one of the most useful mortgage products available.

Versatile, flexible credit qualification and low down payments make FHA 203K loans a great choice for buyers looking to purchase and renovate a foreclosure. that’s not the only use though, 203k loans serve a variety of purposes outside of foreclosure or short sale purchases.

The =&0=& is also perfect for buyers with a specific neighborhood in mind, but no houses that meet their needs.

With the ability to do both basic required renovations so that the home meets FHA collateral guidelines OR to completely craft your dream home with upgrades, additions or green improvements; the FHA 203K loan provides a great opportunity to add energy efficiency to your new home.

So, what is the FHA 203k streamline, how can I use it, what repairs are allowed and how is it different from a standard 203k loan?

The Skinny on the 203k Limited

First, both FHA 203k loans are fantastic renovation mortgage products. The HomeStyle Renovation is no slouch either, but that is a different post. One I suggest you read once you’re up to speed on FHA’s renovation loan offerings.

The distinctions are fairly clear per FHA guidelines; anything structural or anything over $35,000 in renovations requires a HUD Consultant and therefore a standard / full 203k loan.

Anything under $35,000 with cosmetic only type improvements usually qualifies for the FHA 203k Limited.

Many lenders only offer the Limited 203k, they do not offer the consultant version. Some mortgage lenders ONLY do the full 203k, they prefer the layer of protection that the HUD consultant provides.

We offer both FHA renovation mortgage products and prefer to guide you into the right renovation loan; not just the 203k renovation loan that we offer.

Renovation mortgages are massively important, lenders that only offer the Limited 203k (or limit themselves to a tiny selection of rehab loans) are doing a disservice to all parties.

The 203k streamline is incredibly flexible on what renovations and upgrades you can finance into your renovation loan. Here are just a few of the eligible home improvements you can make with the FHA 203K Limited:

=&2=&

Windows & Doors

Roofs,Fascia & Soffits

Drainage Issues

HVAC & AC Systems

Kitchen Renovation

Bathroom Upgrades

Flooring

Appliances

Energy Efficient Improvements

Decks, Patios & Porches

Lead Based Paint Abatement

Handicap Accessibility

Well & Septic Systems

Plumbing / Bath / Shower / Toilet

Electrical Upgrades

Basement Build-Outs

Tankless Water Heaters

Insulation and Weather Stripping

Solar Energy Panels

Interior & Exterior Paint

Keep Reading...

Delaware FHA 203k Loan Overview

John Thomas June 26, 2010 Tags: Delaware FHA 203k Lenders, Delaware FHA 203k Loan, Delaware FHA 203k Streamline Loan

Delaware FHA 203k Loan Overview

The FHA 203k Renovation Loan in Delaware is a great way to purchase a new home in Delaware in need of repairs or renovate your current home. Think of it as a one-time-close construction loan but with more relaxed standards because it’s insured by FHA. Below are some of the highlights and some useful information providing a Delaware FHA 203k Loan Overview. If you would like to discuss your unique situation or to apply please give me a call today at 302-703-0727.

Advantages of FHA 203k Rehab Loan:

Allows repair/renovation costs to be rolled into the loan

Major items (such as foundation repair) ARE allowed

Low down payment (3.5%) and the seller can still pay up to 6% of your closing costs

Close before the repair/rehab begins

Only one closing, money is disbursed on a draw basis after closing directly to the contractor

Buyer can include optional upgrades (such as granite counters)

Keep Reading...

Delaware FHA 203k Rehab Loan – Selecting Contractors

John Thomas May 15, 2010

Delaware FHA 203k Rehab Loan Selecting Contractors

Here are the guidelines you must follow when selecting a contractor to give a bid for the repair work:

CONTRACTORS AND REHABILITATION CRITERIA

1. Must use contractors to complete repairs/rehabilitation (unless borrower can demonstrate needed expertise/experience)

2. Use of contractors:

A. Borrower selects contractor

B. Contractors provide estimates for the work to be done, if applicable

C. The lender must review the contractor’s credentials verifying jurisdictional requirements for licensing, bonding & insurance are met (need copy of all these docs)

D. The cost estimate(s) must clearly state the nature and type of repair and the cost for completion of the work item

E. The lender will review the work plans and estimates with the borrower

F. The lender may require the mortgagor to provide additional cost estimates if necessary

3. Borrower(s) to complete work, Lender must document that:

A. The borrower has the necessary expertise and experience to complete the work in a satisfactory (workmanlike) manner (ie: borrower is a licensed plumber and will complete that portion of the work)

B. The work can be completed in a timely manner

C. An agreement is executed by the borrower and lender

D. The cost of labor is included in the repair/rehabilitation cost (in case the borrower is unable to complete the work and a contractor must be hired). The mortgagor may not be compensated for his/her labor.

E. Estimates of the repair/rehabilitation costs

F. The borrower has provided written estimates from the suppliers of the materials that the mortgagor will purchase

G. Cost plus or time and material contracts are prohibited

4. The Rehabilitation Construction Period begins when the mortgage loan is closed

If you would like to apply for a Delaware FHA 203k Rehab Loan, you can apply online here or please call me at 302-703-0727 or send an e-mail to DelawareMortgages@yahoo.com

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

Delaware FHA 203k Loans – Can you still use Down Payment Assistance?

John Thomas March 17, 2010 Tags: Delaware FHA 203k Loan, Delaware Rehab Loan, Delaware Renovation Loan

Delaware FHA 203k Rehab Loans are used to repair or renovate properties all in one loan when you purchase a property. A typical question for a first time home buyer is if you can use one of the down payment assistance programs with an FHA 203k loan such as the Delaware State Bond Program. The answer is “no” because the bond loan is originated by a bank and then bought by the Bond program investor.

The 203k Loan can’t be bought right away because a repair escrow is set up for the repairs to be done and the distribution of those funds must be managed by the lender which the bond investor is not going to do. Most down payment assistance programs also require that the property meet occupancy requirements.

If you have questions on buying a home in Delaware with an FHA 203k loan feel free to contact me at 302-703-0727. I am a local rehab and renovation loan specialist that can help you with applying for an FHA 203k loan. You can APPLY ONLINE for a 203k Loan.

You can also purchase a copy of Your Guide to Buying Your First Home in Delaware Book which has a chapter on Delaware FHA 203k Loans.

You can also register for one of our monthly Free Delaware First Time Home Buyer Seminars

www.DelawareMortgageLoans.net/seminars

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

www.PRMIDelaware.com

What is a Delaware FHA 203k Streamline Loan?

John Thomas March 14, 2010 Tags: FHA203k Streamline

What is a Delaware FHA 203k Streamline Loan?

FHA 203(k) loans provide cost-effective, single close loans that enable borrowers to purchase a home that may need repairs or refinance their existing home for the purpose of remodeling.

With the Delaware FHA 203k streamline loan you can borrow up to $35,000 into the mortgage to make improvements or repairs. The program includes the necessary funds for the renovation by financing the “as-completed” value of the home, rather than the present value.

The Delaware FHA 203k loan is a great option for the following situations

Borrowers who are looking for cost-effective ways to renovate, repair or improve an existing home.

Borrowers who would like to rehabilitate a foreclosure that has been neglected or damaged by the previous occupant.

Borrowers who want only one loan, with one closing and underwriting review for both rehabilitation construction and permanent financing.

Borrowers who may not qualify for conventional financing

Borrowers who would like to avoid having to obtain closed-end second mortgages or HELOCs for repairs, renovations, and improvements.

Borrowers who would like to obtain financing based on the “as-completed” value of a home.

Borrowers who want to improve their home and neighborhood.

Keep Reading...