Renovation Loan
How are Renovations Financed?(and why is a Renovation Loan better?)
Purchase Rehab $2 BillionOther First Lien Rehab $18 Billion125 LTV $4 BillionUnsecured $25 BillionSavings $72 BillionClosed End Seconds $31 BillionHELOC’s $13 Billion
Renovation cost in tax deductible mortgage rather than high cost credit cards or retail installment loans.
Can escrow payments while repairs completed.
Escrow funds in interest bearing account (203(k) and Home Style only).
Frees cash on hand for other investment opportunities.
Only one monthly payment
Increase your volume by 20% Increased sales amounts Increased referral business
Eliminate 95% of your competitionGain a competitive edge
An FHA Rehabilitation Mortgage1st Lien PositionOwner OccupiedAssumableMixed Use PropertiesMinimum $5,000 repairs required
An FHA Rehabilitation Mortgage1st Lien PositionOwner OccupiedAssumableMaximum $35,000 in repairsNo Consultant requiredNo Structural repairs
1-4 Unit Owner Occupied Condos (interior only) Manufactured Homes Mixed Use Properties Existing homes complete for over 1
year New Construction on part of original
foundation Existing home moved to new
foundation
Health and safety repairsCorrections of code violationsCorrecting structural deficienciesRepairs necessary to meet HUD
property complianceSmoke Detectors
Structural alterations and additionsRemodeling kitchens and bathsChanges to eliminate obsolescence
and reduce maintenanceModernize plumbing, heating, AC
and electrical systems Install or repair well or septic
systemsRoofing, gutters, downspouts
Repair/Replace roof, gutters and downspouts
Repair/Replace or upgrade HVAC system Repair/Replace or upgrade plumbing and
electrical systems Repair/Replace existing flooring Minor remodeling of kitchens Weatherization New Appliances Painting Repair/Replace or add deck, patios and
porches
Conventional Renovation LoanOwner occupied, Investors or 2nd
HomesNo minimum loan sizeMaximum amount of rehab is 50% of
the as-completed valueQualify borrowers using DUOwner Occupants may finance up to
6 mortgage payments
Enhanced Allowable Loan to Values Owner Occupant▪ 95% 1 Unit▪ 95% 2 Unit▪ 80% 3-4 Unit
Second Homes 95% Investor
1 Unit 80% 2 Unit 70%
1-4 unit Primary1-2 unit Investment1 unit Second HomesCondosPUDLog and Modular Homes
Structural alterations and additionsRemodeling kitchens and bathsChanges to eliminate obsolescence
and reduce maintenanceModernize plumbing, heating, AC
and electrical systems Install or repair well and septic
systemRoofing, gutters, downspoutsPut in a new swimming pool
Market House with a Renovation & Payment Plan Advertise renovation in newspaper ads or
Community Home booklets Improve Listing Power
Get the listing by assuring the seller a quick sale advertising their home as the “Create your own dream home!!!”
Create a vision for buying decision Watch for reactions to specific parts of the
home.▪ Use phrases like…▪ “If you want to change the color of the carpet in the living room, you can just include that in your mortgage.” or the kitchen cabinets
All rehab Loans Need Bids And Proposals from licensed general contractors .
Build strong referral relationships with realtors selling homes that need TLC.
Offer rehab loans to your clients as a way to finance their projects.
This can be a huge Public Relations benefit. Improving the neighborhoods Reducing crime or property damage to
homes sitting empty Values increase as homes are renovated
Hans FetterhoffSr. Mortgage Consultant
Whitmor Financial 6170 N. Lehman Dr.Colorado Springs Co, 80918
719-302-3586 Office719-686-3652 [email protected]“You’re Better Off With Fetterhoff”