Skip to main content

Opportunity for Renovation Loan

 Fannie Mae Homestyle and FHA 203K Loans Looking Attractive


In today’s United States real estate market, homes under $400k are in demand, and depending on your house location, you may not get a house in an updated condition in that price range. The lower you go down in price, the more questionable the shape of the house. Creativity can go a long way to the enhancement of the property condition deficit. 

The right contractor can bring your creativity into actuality to make the property worth its weight in equity. Most foreclosure, bank-owned, or homes in short sale status can be valuable when you buy the property in its current condition then update the house to the most modern standards. In the past, most homebuyers avoided these deals and left it to the investor to purchase, but investors are having trouble with the high prices.

Usually, an investor would buy properties under foreclosure then fix up the property and sell it to a homebuyer at the repaired value. The prices of the foreclosure properties are getting too high for it to be profitable for the investor to buy these properties. The margin between the foreclosed price and the repaired price is getting too slim. Demand will indeed drive the price up but that works more for the homeowner who lives or holds the property for a few years or at least so the appraised value can catch up to the demand. Keeping the property for more than six months for a repair and flip is not beneficial to an investor.

Furthermore, the market seems geared to pushing Fannie Mae Homestyle Loan or FHA 203k loans. Fannie Mae and Freddie Mac in several cases are promoting homeownership by making their house deals available for 20 days only to buyers that will live at the house. If there are no bids from homebuyers that will occupy the home, then investors are allowed to bid on the house. 

Most people in the past shied away from using FHA 203k insures because of the amount of paperwork involved and in most cases, had to wait four months before the deal could be on its way. Using a Fannie Mae Homestyle Loan coupled with a HomeReadyTM loan sweeten the deal for homebuyers to buy a fixer-upper. 

The HomeReadyTM loan allows you to add family members into the investment to help with qualification for the loan. With a credit score of around 680, you can qualify to make the loan possible with only a 3 percent down payment. The Fannie Mae Homestyle loan is more flexible than 203k FHA because it is a conventional loan. Three months payments can be rolled into the loan so that you don’t start paying the mortgage until the property is habitable. 

The program allows 140 days to complete the renovation on the house, and this is where the right contractor comes into fulfilling the deal. It makes good dollars and sense to get a fixer-upper house that you can make your home under these loan conditions.

Comments

Post a Comment

Popular posts from this blog

Downsizing for Retirement

“I met my girlfriend in college who later became my wife. After we both graduated from college and pursue our careers we thought of having kids. After about five years we were able to save enough money to make a down payment for the house of our dreams. We got a single-family colonial 5 bedroom house. At the time we wanted a house big enough that we could raise a family. Our kids are all grown now and have started their own families. We do not see them much other than sometimes on Christmas. Though we have created lasting memories in the house it is feeling too big to manage and maintain. Both my wife and I have both been retired for a few years and are on limited retirement benefits. I have arthritis in my knee and it is perplexing to climb the steps every day to go up to my bedroom that often time I sleep on the sofa in the family room. When I was younger it was easier to do things around the house but climbing ladders, mowing the lawn, snow removal, etc., is too much at my age. The ...
Post a Comment
Read more

How to get the Max House Value

After living in your house for years, you have come to the point where you desire to sell your home. During those years you had it painted the way you wanted and made your dream home come through. Now is time to pack your dreams and leave the house for someone else to create their dream home.  In the attic and the garage, you accumulated a lot of stuff over time, and at that time you bought them you thought it was a good idea, but there is no room to walk in those areas. You always thought one day you might need it, and even though you never used them, you could not come to grips with getting rid of them. You wonder if anyone will notice the water stain on the ceiling that seems to spread a little more than it did a few months ago, but since there was no need for a bucket, you avoid spending money to investigate what causes it because you fear the expense of knowing.  Though this scenario is fictional, it may be all too familiar, and most selling agents have confronted similar...
Post a Comment
Read more

How Home Value Works

The real estate market in the United States is on its way up again. You can see prices rising in most cities. Real estate is similar to the stock market; stock that rises can fall as well. As opposed to the Stock Market, the best thing with real estate is that if the real estate market crashes, you have something tangible to hold onto rather than valueless pieces of paper.  The main thing you should be mindful of in real estate is to know the value of your real estate at all times. Like the stock market, many things can influence the rise and fall in the market value of real estate. Real estate can rise when the demographics changes from a predominantly low-income renter’s occupied property to owner’s occupied property. It also has to do with the income bracket of the owners. Frequently some may think it is the real estate property and the improvements that add real estate value to the real estate property, which is not entirely true.  The most significant influence on...
Post a Comment
Read more