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Streamline 203(k) Loans Program Highlights

Understand the FHA Renovation Program with its simplified process and eligibility for various property types. Learn about common improvements, eligible improvements, calculating loan amounts, and who can perform the work. Get insights on the closing process, post-closing procedures, and benefits of selling a Streamline K property fast.

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Streamline 203(k) Loans Program Highlights

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Presentation Transcript

  1. Understanding Streamline 203(k) Loans

  2. Program Highlights • FHA Renovation Program • Simplified process! • Up to $35,000 in repairs with no minimum! • No consultant required • Two draws per contractor • Contractor can receive up to 50% of total costs up front to defray cost of materials

  3. Eligible Properties • 1-4 unit owner occupied properties • Town houses • Condos (interior only) • Row homes • HUD Repos

  4. Common Improvements • New free standing appliances • Interior and exterior painting • Flooring, carpeting and tile • Energy efficient improvements • Other improvements that are a permanent part of the real estate

  5. Other Eligible Improvements • Changes to eliminate obsolescence and reduce maintenance • Modernize plumbing, heating, AC and electrical systems • Install or repair well or septic system • Roofing, gutters, downspouts • Lead based paint abatement

  6. Calculating Loan Amount • Use Maximum Mortgage Worksheet (Purchase) • Purchase price • Cost of repairs • Contingency Fund (optional) • Inspection fees and title updates • Permit Fees • Supplemental Origination Fee (1.5%) • Compare to 110% of after-improved value and use the lesser of the two calculations • Multiplied by the LTV Factor

  7. Calculating Loan Amount • Use the Max Mortgage Worksheet (Refi) • Existing Debt • Total Cost of Repairs • Closing Costs, Prepaids and Discount Points • Less FHA MIP Refund • Compare to lesser of 110% of after-improved value or “As-is” Value + Renovation • Multiplied by the LTV Factor

  8. Who Can Do the Work? • Borrower can select their own contractor • Should be licensed and insured if required by municipality • Should be able to document qualifications • Borrower can do their own work only if they can document their qualifications

  9. Getting them Closed • Borrower collects contractor bids • Bids are used to order appraisal • Appraiser will do subject-to appraisal • Borrower and contractor sign contract

  10. What Happens After Closing? • Customer receives a “welcome” package from M & T Bank – Mortgage Division • Work begins • Up to 50% can be paid to each contractor up front • Title update will be needed • Final inspection will be done to ensure workmanlike completion of work

  11. Selling the Streamline K • Much faster process to get to closing • Include appliances and cosmetics • Up to 110% of after-improved value • Overcome borrower concerns about property

  12. Get the message out to those who can build yourbusiness with you. • Realtors • General Contractors • Dealers • Community Groups

  13. Questions? Please Contact Your Account Executive Or Broker Service Representative at 1-800-378-7212 Thank you for your business.

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