1 October 2009 ? The ever evolving lending world is changing yet again. As of January 1st, 2010 the Federal Housing Administration will be shifting responsibility of FHA insured loans off of the mortgage broker and solely on to the lender funding the loan. This was/is designed to spur on home sales and we all know that home sales are critical to the economy.

Does this shift mean that the floodgates of loans will open and more homes will change hands in 2010? I am not so sure. We have to remember there are many obstacles to obtaining a loan these days. First and foremost, the funding sources will have new requirements that will need to be met in order for them to insure the loans. Not only that, many experienced appraiser’s are leaving the industry due to the changes brought on by HVCC but by the extra paperwork involved with being an FHA appraiser. FHA insured loans and lenders have hired an army of “reviewers” who’s job it is to nitpick every appraisal report for typos and computer errors. Enforcement can be arbitrary and variate with each reviewer. The penalty, of course, is not only dismissal from the roster, but the loss of the appraiser’s state license. The liability has become too high and Appraisal Management Companies are eating up any potential profit. Again, I truly believe we cannot have the experienced appraiser’s leaving the industry. The bottom line of the loan does rest on the appraiser’s opinion of value.

Less South Loop Construction Means Reduced Supply...Eventually

I think there is light at the end of the tunnel. We can certainly see it in our showing activity and in the market. It’s still not an easy market or necessarily a fair market for all involved, but it is changing for the better. Statistics from Illinois Association of Realtors (IAR) definitely back up the these feelings.

Chicago-area sales in May had the smallest drop so far this year at -18.7%. 5,634 single-family homes and condominiums were sold in May in the nine-county Chicago region, compared with 4,747 in April 2008, the IAR said. The association is reporting the following Year-on-Year Declines:

Monthly Year-on-Year Comparison of Home Sales (Single-Family and Condo) in the Nine-County Chicago Area:

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Month-on Month Home Sales Up In Chicago Area

Month-on-month total home sales (which include both single-family and condominiums) were up 19.3% in May 2009 with 8,945 homes sold compared to 7,501 homes sold in April 2009. This is showing the market picking up some speed and buyers feeling more confident in purchasing. Now take this compared to a year ago, when month-on-month home sales were down 21.0% from May 2008 with a home sales number of 11,326 for 2007. We are not back to 2008 numbers yet, but are working on it. The activity is growing and there is an air of growing confidence as well. This is what the market needs right now. There is still a plethora of inventory available, but I think by fall it will start to thin out and come back to more a stable market. Everyone is looking for a good deal right now. Prices are still dropping to meet consumer demands, but are stabilizing just a bit and not falling so drastically. If you have an aggressively priced listing in this market, odds are it will sell.

“We are seeing more activity in the housing market with increased listings, more activity at showings, a surge in interest from first-time buyers as well as some improvement in time on market,” said REALTOR® Pat Callan, president of the Illinois Association of REALTORS®. “First-time home buyers who want to take advantage of the $8,000 tax credit need to be aware that the purchase has to close no later than November 30, 2009 given the December 1 cut-off under current guidelines by the federal government. That means being under contract by early fall.”

Dr. Geoffery J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois said, “Month-to-month sales have recorded increases for the months of March, April and May and this is expected to continue into June. The modest recovery in housing prices and sales has been constrained by the job losses in the economy as a whole. A sustained housing recovery is still not within sight and much will depend on the degree to which federal stimulus funds and the resolution of the state?s budget generate a much needed boost to employment.”

Chicago Home Sales Up 11.5% in May

In the city of Chicago, month-on-month May total home sales (single-family and condominiums) were up 11.5 percent to 1,537 sales compared to April 2009 sales of 1,378; year-on-year sales were down 27.5 percent from 2,119 homes sold in May 2008.

“We?re encouraged to see the bank-owned inventory moving in the marketplace, indicating buyers are finding good bargains, especially in single family homes and flats,” said David Hanna, president of the Chicago Association of REALTORS®. “The city of Chicago condominium sales numbers continue to reflect a critical need for governmental agencies to review the growing disparity in the ability to finance a condominium purchase in the city. This affordable housing will become unaffordable and unattainable to many qualified first-time home buyers in the city of Chicago unless existing federal guidelines, which do not take into account nuances of the local market, are modified.”

Buyers Will Come Out in the Fall

To David Hanna’s quote I say, I think that the feds are addressing this…not quickly enough, but it is being addressed. The FHA guidelines that make it nearly impossible to get financing on a condo in the city are being removed as of October 2009. Some of these guidelines include right-of-first-refusal, liens against the association, and association controlled by the owners (not the developer). Come fall I think we will begin to see a larger number of FHA condo buyers enter the market and also use the $8,000 first-time home buyer tax credit. Watch out lenders…take your vacations now!

We’d like to thank Payton Chung for sharing today’s photo via the Creative Commons License.

How much do you qualify for?

203k's are about fixer-uppers

Qualifying for a 203k loan is very similar to qualifying for other types of loans. To give more exact numbers, I generally like to spend some time on the phone or in person with the borrower, and take a look at their credit, income, and assets. A rough guide is to buy a home worth 2.5-3.5 times what you make combined in a year. Some people recommend, “buying as much house as you can qualify for, because it’s the biggest investment you’ll likely ever make.” I don’t agree with that. I believe that you should have a payment you are comfortable with, and one that gives you enough room to save a bit, and allow for unexpected expenses. For example, a couple making $80,000 per year should be looking in the $250-300k range, tops.

There are mortgage calculators available to tell you how much the payment would be at a given interest rate and loan amount, but real estate taxes and insurance also come into play. FHA loans require escrows for taxes and insurance. Take 1/12th of the annual taxes and add that to your payment and 1/12 of the annual insurance also. Rough numbers would be somewhere around $75-100 per $10,000 borrowed, including taxes and insurance. So, depending on the county, etc, a $250,000 house would be in the $2000-2500/mo range, roughly.

The FHA guidelines are 42% debt-to-income ratio, but depending on credit scores and reserves, you might be able to get away with 50%. For example, let’s say you make $6000 per month, and you have $600 per month in car payments, and $400 a month in student loans and credit cards. $6000/2=$3000 mo (50% DTI) – $1000 (other debts) = $2000/mo maximum for total PITI (principle, interest, taxes, and ins), which means the maximum loan would be somewhere around $200,000 to $225,000 or so. The minimum down payment for a FHA loan is 3.5% of the purchase price (15% for 3-4 units). You also want to have at least 3 to 6 months PITI reserves after the down payment.

What is the process to get a 203k loan?

FHA loans are only for owner-occupied properties, not investments. The first part of the process is to get pre-qualified. For clients I take a look at income, credit, etc, and make sure you can get a loan. We’d write up a pre-approval letter that the buyer and/or real estate agent puts in with the offer. You reach an agreement with the seller, get estimates on any needed repairs, then process and close the loan. The seller gets the money for the purchase price, and the money for the repairs goes into an escrow account to be disbursed by a HUD counselor as repairs are finished. And, of course, there are inspections along the way.

Very important: There are two types of 203k loans: regular 203k, and a streamline 203k.

• If you can keep the total to less than $35,000 the hardest part is getting a “spot approval” for the contractor.
• A “full blown” 203k is much harder to get the contractor approved, and everything gets reviewed much more thoroughly, and just makes your life a little tougher in general. You can also set some of the money aside to be put toward your PITI payments until the work is finished, so that you aren’t paying rent and a mortgage.

What is the interest rate on FHA vs. 203k vs. conventional?

Lakeview graystones in Chicago...yep, they qualify for 203k loans.

Regular FHA rates are pretty close to conventional rates. Right now they are around 5% or so, with no points. I want to put an asterisk (*) by this, because obviously we haven’t locked a rate, and lower credit scores (under 660 on FHA, and 700 on conventional) can be slightly higher. Also smaller loan amounts (under $150,000 or so) are usually a little higher.

The biggest difference is the mortgage insurance. All FHA loans have mortgage insurance (MI). If you are putting down 20% or more, and have very good credit scores, a conventional loan probably makes more sense. For higher loan to values (LTV), or slightly lower scores, FHA is probably the way to go. But, 203k rates are considerably higher. Right now, it’s probably about 6% with 1.5-2.0 points (a point is one percent of the loan amount), so take that into consideration for your down payment, along with underwriting fees, title fees, FHA counselor fee, and transfer tax if you are buying in Chicago.

FHA does allow for a seller concession of up to 6% of the purchase price to go toward your closing costs. It may be more advantageous for a buyer to negotiate a little more back for closing costs rather than just lowering the price as much as possible. On the plus side, once the work is completed and a few mortgage payments have been made, the homeowner can do a FHA streamline refinance and take the rate down to the current market FHA rate. Also, single family residences (SFR) are much easier to get done through an FHA loan than condos or townhomes. Associations can be deal killers to FHA loans.

We’d like to thank rioncm for so kindly sharing today’s photo via the Creative Commons License.

Drop After Drop Adds Up

In the first articles I showed how you can save energy and money and have a positive impact on the environment by going green and I showed how important an energy audit is for providing a road map to going green in your own home.

Now that I?ve laid some of the groundwork, most people want to know how to pay for it. My basic tenet is that there is a shade of green for every project and every budget?. Finding the right shade for your individual lifestyle and budget will mean some compromises along the way. But making the most of your energy audit is important. You only have the mental and physical fortitude to undergo disruption to your daily life so many times. So making the most of the time you devote to any home renovation project, green or otherwise, is critical.

In the US, the bulk of the homes that are currently being occupied were built during the housing boom of the 1970?s and 1980?s. These homes are nearing architectural and mechanical obsolescence. Also, these structures account for over 40% of energy consumption and 75% of electricity consumption annually. Can you imagine the impact to our economy if we could reduce those numbers by 10%? The way to do that is to renovate existing buildings, starting with residences.

Let’s Assume You Aren’t Rich and Want to Go Green

I’m going to assume that the family interested in going green does not have the cash available to pay for all the costs of an energy efficiency renovation all at once. You don?t want to use a credit card to finance the purchase, as the interest that you would pay makes the entire process much more costly than needed. So where can you turn?

There are federal and state programs available to help offset the costs of going green. There are local incentives, grants, and rebate programs available to help people achieve energy efficiency improvements, and there are various types of lending programs, from home equity loans to personal lines of credit available form many different sources that are specifically geared to the energy efficiency market. I will give you the ?get started? information to help you find the right program for you.

Federal Resources for Helping to Pay for Going Green

At the federal level, the American Recovery and Revitalization Act (ARRA) passed on February 17, 2009 included billions of dollars in stimulus funds for energy efficiency improvements. Chief among these are the federal tax credits that are available to take for energy efficiency upgrades to your own home for 2009 and 2010 tax years. In summary, the federal government will repay you up to $1500 (previously limited to $750) of the costs of energy efficiency improvements for windows and doors, roofing material, water heaters, insulation, and biomass stoves. In addition, the federal government will pay for 30% of the installed costs of renewable energy upgrades like solar power, geothermal heating and cooling, solar hot water heating, small wind energy systems, and fuel cell technology. Previously the allowable tax credit was capped at $2000. Now, it is uncapped, so they will pay for a full 30% of the costs!

Builders, developers, and commercial property owners can take advantage of these credits as well, but in this care they are based on square footage, not on costs. See the IRS website or the above link for the details.

State-based Resources for Going Green

In addition to the rebates available from the federal government, there are programs from the state that are available to offset costs of energy efficiency improvements. If you visit DSIRE (Database of State Initiatives for Renewables and Efficiency), you can click on any state and find out what rebates and incentives are available. For the Chicago area, the state will rebate up to 30% of the costs of solar power installations. The program is administered through the Illinois Department of Commerce and funded through the Illinois Renewable Energy Trust Fund. The current plan expired on May 1, 2009, but the next round of funding will begin July 1, 2009. The city of Chicago also encourages green building and will fast-track permits and waive up to $25,000 in fees for green certified projects.

For those of you in Wisconsin, you hit the jackpot! There is a fantastic program available for renewable energy and efficiency upgrades called Focus on Energy. This program will offset costs for a host of renewable energy products up to 25% of costs or a maximum of $35,000. Its current funding expires June 30, 2009, but will renew.

Energy Companies Help You Go Green

Grants and rebates are available from the utility companies as well. People’s Gas and NorthShore Gas both have rebate programs that they have extended until October 31, 2009. This program will cover costs of insulation up to $750, clothes washers up to $100, water heaters up to $75 – $400, gas furnaces up to $450, and gas boilers up to $600. It requires professional installation of everything, and you can apply for the rebate online.

ComEd does not have as much of a program available. They will sell you discounted CFL bulbs, can help arrange a home energy audit, and can set up electricity cycling programs for you. Also, they will pay you $25 to recycle that old refrigerator that you plan on replacing with a new, EnergyStar® model.

For those of you in southern Illinois or some of the western suburbs, Ameren has a different set of programs, much better than ComEd. They will help with heating, air-conditioning, lighting, and with the home energy audit, as well as refrigerator recycling.

How About Weatherization Help?

Now, for funding of weatherization improvements, the Illinois Home Weatherization Assistance Program is the place to start. On their web site you will be able to locate local programs. This is geared to low income families, but the information available is good, and at the very least, you can get a good contractor to help with your project. This is funded through the Department of Energy and the money is given to each state to distribute through its weatherization programs. This program will also cover the cost of the home energy audit in some cases.

Can I Get a Loan To Go Green?

The last topic I want to cover is funding though loans. The Department of Housing and Urban Development administers a huge number of programs that are designed to help average Americans finance, refinance, or improve their homes. There are a few income and home value limits, but a vast majority of Americans will fit into its broad criteria.

First, there is the Energy Efficiency Mortgage (EEM) which is a stand-alone product available to help cover the costs of home efficiency improvements. The maximum amount is 5% of the home?s value not to exceed $8000. Now, this may not seem like much, but the beauty of this program is that it can be added to any other FHA/HUD program without penalizing the owner/purchaser on the percentage of loan to value. So, say you want to borrow $250,000 to buy and renovate a home (or refinance an existing home). Though this program you can borrow $258,000 even if that additional $8000 would push your loan over the maximum loan to value. It?s a ?free? $8000 to use for energy efficiency upgrades.

Where this really works out is with the 203k loan program which is designed to encourage purchasers to either renovate their existing home or renovate a home they intend to purchase and live in. (See this previous The Chicago 77 post for more details.) The beauty of this program is that it looks at the value of the home as completed after the renovation, not the value at the time of purchase. The program will help pay for design, inspection, and the energy audit, as well as all the construction. Click here to see a visual overview of this program. There is also a limited repair program that provides $35,000 for home improvements to a home purchased. This additional $35,000 becomes part of the mortgage, allowing the buyer to do significant work to a home before moving in and paying for it over the life of the mortgage.

Fannie Mae also has innovative programs for renovation/purchase of single family homes.  This is called a HomePath® program. There is another program called HomeStyle®

Freddie Mac has a similar array of programs. The best bet is to contact an FHA/HUD approved lender to determine the best program for your situation.

In the more commercial market, Wells Fargo Bank has a variety of loan programs available that are geared toward energy efficiency and green living. There are others, but Wells Fargo seems to have the most developed program. The idea for all of these programs is that the lenders know that you will be saving significant amounts of money in utility costs and reward you with either a larger amount available to borrow based on your credit score, or a discount on the rate you are borrowing at.

That about covers what I know regarding funding, financing, rebates, and rewards for energy efficiency improvements.

For those who are immediately interested in upgrading their home, purchasing a new home, or renovating an existing home, make sure to read by bio below for ways I can help.

My thanks to Brad Walbrun for providing some background material on the 203k-mortgage program.

Going Green Series

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6 May 2009 – Stocks have crept upward this week, with the Dow being above 8,400 Wednesday morning. Tuesday and Wednesday mortgage rates have inched downward very slightly.

Did you know? 1) For quite some time now, conforming and FHA fixed rates have been as good, or even better than, adjustable rates. 2) Many parts of McHenry, Lake, Kane, Will, and Grundy counties qualify for USDA loans, which set up its guidelines for ?rural? communities over 20 years ago, and hasn?t updated them since.

I hear people say all the time, ?Oh, a reverse mortgage? I’ve heard those are bad,? or some variation. I?d like to tell you why they can be a lifesaver for the right person.

First, Who Is Not Right for a Reverse Mortgage

For instance, my parents are debt free, and pay for everything in cash. They aren?t rich, mind you?my dad was a union plumber, and my mom stayed at home with us, and they have a modest house which they have lived in my whole life and which has only had one mortgage on it that was never refinanced?but they were very good with their money. If there was something they wanted to buy, they saved up until they had enough to buy it. So they have two cars free and clear, and a free and clear title to their house. They now subside on a monthly social security check and a plumber?s pension, which is more than enough for their monthly bills and a couple of dinners out a month. They are not the kind of people who would benefit from a reverse mortgage. I wouldn?t even bring it up to them.

Description of Someone Who Could Use a Reverse Mortgage

Then there?s my uncle. He buys a new truck every few years and finances it. He refinanced his mortgage a couple of times in the last several years to take some cash out for home improvements and to lower his interest rate. I don?t know his exact age, but he?s a little bit younger than my father, and is going to be coming up on retirement age soon. I don?t know exact figures, but I can give you a ballpark of what his income will be upon retirement. Probably somewhere in the neighborhood of $1000 a month for social security, and $2000 a month for pension, give or take. So, he might have a mortgage payment of $1200 per month, and a car payment of $600 per month for the SUV. And if he?s been making $60,000 per year, he has been making his payments no problem. So, he retires, and figures he?ll have enough coming in that he shouldn?t have any problems. But all of the little things add up-gas bill, electric bill, cable bill, water bill, phone bill, cellular bill, sewer and waste bill, etc. And let?s not forget about the normal maintenance items that we have: car tires, oil changes, license plate renewals once a year, repairs and maintenance around the house (water heater, furnace, air conditioner, windows, paint, etc), a new lawn mower or snow blower every so often. You get the idea. And before you know it, he has almost nothing left in savings, and is scraping by and juggling monthly bills.

If you?ve never really been broke and struggling, you probably don?t appreciate what a terrible place it really is to be in. And there are probably people you know: friends, relatives, people you see at church or at your child?s school who are in a very bad place financially, but you?d never know it. They might be embarrassed or ashamed, or be private people, and nobody would ever know what they are going through. And it?s a pretty easy place to slip into, especially for seniors living on a fixed income who can?t just go out and get a job.

Many Seniors Can Use Some Help

Retirement can be a long journey

I grew up in Northeastern Wisconsin, a little south of Green Bay. Our neighborhood?our whole town in fact?was very middle class. When I was a kid, I had a paper route. It was $3.50 a week, or $14.00 month, for the daily paper, including Sundays. (Yes, it was over 20 years ago, and I am showing my age.) I had a lot of older couples on my route. I had one lady pay me every week with all change-and no quarters. She?d give me a little baggy with pennies, nickels, and dimes, with exactly $3.50 in it every week. I had a few customers that I could only collect after the 3rd or 5th of every month?after their check came in. Looking back, I didn?t realize at the time that many of them were fairly strapped financially.

Now, let?s fast forward, back to today. Let?s take a senior living solely on social security (which probably won?t be around by the time I retire, but that?s a whole other article entirely), and a modest pension. Over the last several months, nearly all investments have taken a serious beating, so their retirement checks are likely less than what they were getting. And if somebody has some serious medical problems, it can throw the seniors into a tailspin. There can be medications or rehab that isn?t entirely covered by insurance. Or if one of the partners has to go into a nursing home, it can be devastating. Now you have somebody who had a modest living, and has been thrown into a desperate situation.

If that person has a home worth $150,000 with a mortgage of $50,000 on it, they probably have payments somewhere around $500 a month. They?ve lived in that house forever, and really don?t want to move. They can do a reverse mortgage, get $50,000 cash, and have their mortgage payment gone forever. And the title to the house stays with them, and they can?t be foreclosed on. Now, you just replenished their savings, enabled them to be in control of their monthly expenses, and helped enormously with their security and peace of mind.

What’s the Other Side of the Coin?

This sounds too good to be true? What?s the downside, you ask? Of course, there is no free lunch?ever. Yes, it is a mortgage, it is a loan, and yes, there is interest on it. It is a negatively amortizing loan, which means the balance goes up over time because no payments are being made. But, if it ever ended up being upside down, the homeowner is not responsible for that amount. They can sell the house, and HUD eats the difference. Reverse mortgages are fully government insured, backed by HUD and FHA, and have many protections in place for the seniors.

Looking at Some Myths About Reverse Mortgages

• MYTH: They can take my house away from me.
• FACT: As long as one of the seniors lives in the house, the loan stays in place, and they retain title indefinitely. They can leave the property to the heirs.

• MYTH: I can end up owing more than the house is worth.
• FACT: If the balance increases, or home values go down, and the balance is higher than the current value, the homeowner will only owe what the house is worth, or what they can sell it for. If the borrower(s) should pass, the heirs have a full year to sell the house or refinance the loan into their name.

• MYTH: I will have to pay all that money back.
• FACT: The loan is only secured by the property, and as long as one of the borrowers is living there, nothing can change, even if one passes, or is moved to a care facility.

• MYTH: I will have to pay taxes on that money.
• FACT: The money is taken from the equity in the house, and does not count as income, and will not be taxed.

What Does It Take to Qualify for a Reverse Mortgage

So many of the things you may have suspected or heard are likely untrue. Ok, so reverse mortgages aren?t all bad; who qualifies for them? The qualifications are fairly simple:

• There is no credit requirement. Somebody could have poor credit, or the house could even be going into foreclosure, and they can get a reverse mortgage.
• There are no income requirements. Since the loan never has to be repaid, there are no income requirements to qualify. The only requirements are age and equity.
• The homeowners have to be at least 62 years old. If one is 62 or older, and the spouse is not yet 62, it probably makes sense to wait until both are 62, so both can be put on the loan, and both are covered.
• Generally, the maximum loan to value (LTV) is around 60%, so there has to be a good amount of equity. They can bring money to the closing to get down the necessary amount if they don?t have enough equity in the house.
• Reverse mortgages can be used to purchase a home. Instead of buying a $300,000 home, putting down $150,000, and making mortgage payments on $150,000, they could do a $150,000 reverse mortgage and never have to make a mortgage payment.

I?d personally never try to give somebody a reverse mortgage if I didn?t believe 100% that they were the right kind of candidates for it. And the government has put protections into place for the seniors, including required counseling before closing, to help guard them. Feel free to contact me with any questions, concerns, or comments.

The Chicago 77 would like to thank la4ko for today’s photo which he shared via the Creative Commons License.

8 April 2009 ? On Tuesday this week, rates got slightly better. Did you know? If you have an FHA mortgage right now, you can likely refinance to a lower rate even if you don?t have any equity, or are upside down. A ?streamline? refinance allows homeowners who have FHA loans right now, and have good payment history, to refinance with no appraisal, and no verification of income. Some economic indicators show that the U.S. economy had stopped getting worse in the first quarter of 2009. In non-economic news, the North Carolina Tar Heels have won the NCAA basketball championship.

Federal Housing Administration

Looking to do some improvements on a home you want to purchase, but you don?t have the money to do it or the bank won?t lend on the property because the collateral isn?t in acceptable condition? The Federal Housing Administration (FHA) 203(k) loan may be your answer.

What Is a FHA 203(k)

The FHA 203(k) loan allows buyers to purchase homes that require some modernization or a variety of repairs. The fixes can range from new floors and carpet to granite counter tops and stainless steel appliances. When you think about all the foreclosed properties on the market and the outdated homes needing a ton of work, this loan can really help buyers who might not have the personal funds in savings or be able to secure a typical construction loan to get the financing. Not to mention that construction loans come with very high interest rates and are short-term, which means buyers would have to refinance after the work is complete. This is not the case with the FHA 203(k) loan.

How Does a FHA 203(k) Work?

Buyers must meet with an approved mortgage banker who is allowed to originate the FHA 203(k) loan, such as A&N Mortgage Services. At this meeting, we determine the maximum amount of financing you’re comfortable with securing, which will also include all the potential repair money necessary for the home of your dreams. Once you are qualified for the loan, you can begin to shop for your home with your real estate agent.

When you have written a contract for the purchase of your home, you then meet with a certified FHA 203(k) consultant and a general contractor to determine the exact amount of money needed for the repair work. The three of you then fill out an FHA 203(k) maximum-mortgage worksheet, detailing all the repairs, to be delivered to the end-investor of the loan. You then go through the typical underwriting process and close on the loan. The repair money is escrowed with the title company, and the general contractor can draw on it with the clearance of the FHA 203(k) consultant.  You also have the option to escrow mortgage payments so you don’t pay on a mortgage until the work is complete. This kind of mortgage is typically a 30-year fixed, so you don?t have to worry about it adjusting or having to refinance right away, something you have to think about with a typical construction loan.  There is the caveat that the construction work must be completed within six months of the closing date.

What Types of Property Are Eligible for a FHA 203(k)?

There is a fairly long list of criteria that must be met in order to qualify for a FHA 203(k):

• Only owner-occupied dwellings
• 1 -4 unit condos, single-family homes, town homes, and multi-units that have been completed at least one year
• Conversions from a 1-unit property to a multi-unit property and from a multi-unit property to a 1-unit property

Why choose an FHA 203(k) loan?

Why not? Below are a variety of reasons to choose this loan for mortgage financing:

• Only requires a 3.5% down payment
• Community and Neighborhood revitalization for areas that are experiencing high foreclosure rates or declining property values
• 30-year fixed mortgage
• Only need a 620 FICO score, but must be approved though Fannie Mae
• Escrow mortgage payments until work is complete
• Design the home of your dreams

This is a great mortgage product that will be a big part of 2009 and the future of mortgage lending. Also, this can increase a real estates agents’ sales potential and satisfy clients who wouldn?t get any other financing. Please contact me at 773-255-1600 or at jfranz@aandnmortgage.com for further details on this product. If you are a Realtor®, I can conduct a FHA 203(k) seminar at my office or in the convenience of yours.