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Unlocking the Power of Renovation Loans: Boost Your Real Estate Business

Discover how renovation loans, including FHA 203(k) and Fannie Mae HomeStyle, can transform your real estate strategy. By offering these loans, you can increase sales volume by 20%, gain a competitive edge, and streamline financing for clients. Understand how renovations can be financed economically and effectively compared to traditional methods. Learn about eligible properties, necessary repairs, and marketing strategies to advertise your listings as customizable dream homes. Contact Hans Fetterhoff, Sr. Mortgage Consultant, for guidance on maximizing your business potential.

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Unlocking the Power of Renovation Loans: Boost Your Real Estate Business

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  1. Renovation Loan Marketing Plan

  2. Market Summary • How are Renovations Financed? (and why is a Renovation Loan better?) Purchase Rehab $2 Billion Other First Lien Rehab $18 Billion 125 LTV $4 Billion Unsecured $25 Billion Savings $72 Billion Closed End Seconds $31 Billion HELOC’s $13 Billion

  3. First Mortgage Advantages • 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

  4. What’s In It for YOU? • Increase your volume by 20% • Increased sales amounts • Increased referral business • Eliminate 95% of your competition • Gain a competitive edge

  5. What Is A 203(k) Loan? • An FHA Rehabilitation Mortgage • 1st Lien Position • Owner Occupied • Assumable • Mixed Use Properties • Minimum $5,000 repairs required

  6. What Is A Streamlined 203(k) Loan? • An FHA Rehabilitation Mortgage • 1st Lien Position • Owner Occupied • Assumable • Maximum $35,000 in repairs • No Consultant required • No Structural repairs

  7. 203(k) Eligible Properties • 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

  8. 203(k) Necessary Improvements • Health and safety repairs • Corrections of code violations • Correcting structural deficiencies • Repairs necessary to meet HUD property compliance • Smoke Detectors

  9. 203(k) Repair Ideas • Structural alterations and additions • Remodeling kitchens and baths • Changes to eliminate obsolescence and reduce maintenance • Modernize plumbing, heating, AC and electrical systems • Install or repair well or septic systems • Roofing, gutters, downspouts

  10. Streamlined 203(k) Repair Ideas • 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

  11. What is the Fannie Mae HomeStyle • Conventional Renovation Loan • Owner occupied, Investors or 2nd Homes • No minimum loan size • Maximum amount of rehab is 50% of the as-completed value • Qualify borrowers using DU • Owner Occupants may finance up to 6 mortgage payments

  12. HomeStyle LTV’s • 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%

  13. HomeStyle Eligible Properties • 1-4 unit Primary • 1-2 unit Investment • 1 unit Second Homes • Condos • PUD • Log and Modular Homes

  14. HomeStyle Repair Ideas • Structural alterations and additions • Remodeling kitchens and baths • Changes to eliminate obsolescence and reduce maintenance • Modernize plumbing, heating, AC and electrical systems • Install or repair well and septic system • Roofing, gutters, downspouts • Put in a new swimming pool

  15. Realtors • 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

  16. Contarctors • 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.

  17. Public Relations • 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

  18. Contact Hans Fetterhoff Sr. Mortgage Consultant Whitmor Financial 6170 N. Lehman Dr. Colorado Springs Co, 80918 719-302-3586 Office 719-686-3652 Cell Hans@SpringsHomesandLoans.com www.SpringsHomesandLoans.com “You’re Better Off With Fetterhoff”

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