WHAT IS IT?
The Federal Housing Administration (FHA) is a quasi-governmental entity. The FHA was created to oversee and support financial institutions that utilize the FHA program to assist lower to moderate-income buyers and sellers. It also assists real estate borrowers by offering an easier to qualify mortgage program.
This finance program for mortgages generally offer reduced down payment requirements as low as 3% down. They also offer lower or weaker credit scores to qualify for loans than traditional lenders may. This program is perfect for the first time buyer or lower income borrower trying to get their foot in the door to home ownership.
HUD HANDBOOK 4000.1
They maintain and update a publication known as Handbook 4000.1. The handbook is the playbook for all loans and property that come through their programs. Handbook 4000.1 has specific criteria that the property must meet and be documented during the appraisal or loan process.
FHA ROSTER OF APPRAISER
The FHA publishes and maintains a roster of approved appraisers for each state. US Realty Consultants LLC is affiliated with Hub Appraisal. Hub Appraisal is on the roster of approved appraisers for Massachusetts.
Are you are a buyer needing this type of financing because of its low down payment flexibilities? Are you a seller who already has a loan in place but looking to refinance with lower equity options. If so, you and the property will be subject to Handbook 4000.1
If you have any questions whether the property may have a problem with this type of financing and ultimately the appraisal, let us know the situation. Part of the periodic training here at US Realty Consultants LLC deals precisely with understanding the FHA’s property conditions requirements.
RENOVATION FUNDING FOR EVERYONE
We also work with buyers who will most likely take advantage of FHA financing options. Whether the base program, the renovation 203K program, or USDA – rural housing, there is a program for most buyers. The USDA has a program in our area of the state for no money down. Let me repeat, NO MONEY DOWN!.
Have you ever seen a bank owned property and wished you could have bought it? Right size, style and neighborhood! Problem is it needs work or modernization.
Did you not have the money for the renovation?
That is exactly what the FHA 203k loan program is for! This program will allow any buyer to buy a property that will need some work and you can build in the renovations into the mortgage. Need a Kitchen – DONE! Need an extra half bath and you know exactly where one will fit – PERFECT! This program will allow you to borrow more than the purchase price to include these projected updates after final closing of escrow.
Of course your income and qualifications’ need to conform to the higher mortgage amount.
The appraisal valuation will be performed and conditioned on completion of the projected renovations. If the improvements help with value to cover the cost, you have a winner.
PROPERTY READINESS
If you are a potential seller, we are ready to assist with readiness and staging. You can place your property on the market knowing the property is in acceptable condition for the stringent FHA inspection process.
An appraiser must perform multiple tasks while at the site. The properties we deal with sometimes have several potential deficiencies that could have been avoided. While many may be minor issues in nature, this still delays the process. It also adds unnecessary stress, more cost, time delays, agreement extensions, or at the worst-case scenario – it kills the deal.
As a seller, you cannot say with certainty if a buyer will walk through that door and need FHA financing. You are better off being safe than sorry.
You may not be sure if your property conforms to the FHA condition standards. Perhaps you should get a quick inspection.
US Realty Consultants LLC performs such a walk-through as part of our service package such as listing your home for sale with us.
This is not an appraisal report. It’s more of a quick consultation and general walk-through to show you the deficiencies or issues that may come up.
If your property is selling to a buyer utilizing FHA financing, or you currently are refinancing through the FHA loan process, you are ahead of the game. This means that the loan has/or will be secured by the FHA, which is a branch of the United States Department of Housing and Urban Development (HUD). The lending organization provides you all the loaned money. The FHA backs the transaction by providing mortgage insurance in case a borrower defaults. The FHA and their loan programs are created to benefit low-to-moderate income purchasers by easing credit expectations.
Call Today!
If you have questions, call or email today to discuss what we can do for and with you!