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 CellHans@SpringsHomesandLoans.comwww.SpringsHomesandLoans.com“You’re Better Off With Fetterhoff”