Renovation LoanMarketing Plan
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
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.
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
What Is A 203(k) Loan?
• An FHA Rehabilitation Mortgage
• 1st Lien Position
• Owner Occupied
• Assumable
• Mixed Use Properties
• Minimum $5,000 repairs required
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
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
203(k) Necessary Improvements
• Health and safety repairs
• Corrections of code violations
• Correcting structural deficiencies
• Repairs necessary to meet HUD property compliance
• Smoke Detectors
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
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
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
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%
HomeStyle Eligible Properties
• 1-4 unit Primary
• 1-2 unit Investment
• 1 unit Second Homes
• Condos
• PUD
• Log and Modular Homes
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
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, bathroom fixtures, appliances, put on a deck, etc.
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