two solutions renovation rob
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Renovation Lending optionsTRANSCRIPT
Two Solutions for RenovationsRobert Rauf, NMLS #248937
HomeBridge Financial at a glance…
A privately held mortgage banking firm founded in 1989
National, direct residential mortgage lender
More than 1400 employees from coast to coast
“Boutique” size and big-bank power gives us tremendous flexibility in everything we do
Currently servicing more than 90% of our current production…
Robert Rauf 732-740-0175 NMLS# 248937
HomeBridge Today…Locations and Licensing
Robert Rauf 732-740-0175 NMLS# 248937
RENOVATION LENDING
Robert Rauf 732-740-0175 NMLS# 248937
What’s the same for both options? Primary Residence only Purchase LTV = 96.5% Refinance LTV = 97.75% High Balance Acceptable Standard HomeBridge FHA Underwriting Pricing is the same for both options No Mixed use, Co-Ops, MH or homes never occupied Contractors must be licensed and insured Contractors cannot have any direct relationship with
borrower Bids must be itemized breaking out Material and Labor
separate Bids must be signed by both Borrower and Contractor Luxury items not allowed Appraisals: Non HUD REO Purchases = After Improved
Value only Appraisals: HUD REO Purchases = As Is and After
Improved Appraisals: All refinances = As Is and After Improved
FHA 203(k)
One Product with Two Options
Robert Rauf 732-740-0175 NMLS# 248937
FHA 203(k)
One Product with Two Options
Streamline: Allows Self Help Allows Up to 3 Contractors HomeBridge Disburses 50% of Material/Labor cost at Closing 1 Unit Dwelling only Maximum $35,000 total Renovation Cost ($31K Material/Labor ) No repair allowed that requires complicated drawings, special permits,
inspections, etc. No structural repairs…think repair / improve / modernize
Consultant: No self Help 1 main GC and 1 Specialty contractor ( case by case ) Project managed by Consultant 1 to 4 unit properties No Funds for Material / Labor disbursed at closing Typically requires 4 to 5 draws ( 10% hold back on each draw ) No limit on Renovation Cost Major repairs the norm…think replace / construct / demolish
Robert Rauf 732-740-0175 NMLS# 248937
Consultant:
• HUD Trained Professional to manage project
• Feasibility Study in place of Home Inspection
• Work Write-Up in place of Home Inspection
FHA 203(k)
One Product with Two Options
Robert Rauf 732-740-0175 NMLS# 248937
When a property is located in a Presidentially Declared Major Disaster impacted by Sandy, foundation repair may be possible provided:
The existing foundation does not meet the new flood elevation +1 foot Any repairs or modifications to the foundation must be REQUIRED by applicable
codes, community development plan, insurance plans, or other local. State, or federal laws and regulations
The foundation, after elevation, must comply with local building codes and FEMA requirements
The lowest floor of the property must be elevated at or above the new Base Flood Elevation based on most current FEMA data, plus one foot of freeboard. The most recent FEMA data includes Advisory Base Flood Elevations or Preliminary Flood Insurance Rate Maps.
File must be processed as a Full Consultant 203K and contain all of the following documents:
Flood Elevation Certificate showing property will meet the new flood elevation standards + 1 foot for the local area
Structural Engineer report stating that the proposed foundation modifications will be capable of supporting the proposed construction of the dwelling
HUD Consultant Feasibility Study stating that the subject property is damaged but can be rebuilt to comply with all local building codes and FHA Minimum Property Standards.
The maximum base loan amount cannot exceed 100% of the After Improved value of the property ( no 110% rule ).
This is effective for case numbers issued from September 27, 2013 through March 27, 2015.
FHA 203(k)
Sandy Foundation Exemption
Robert Rauf 732-740-0175 NMLS# 248937
No Streamline Option feature O/O LTV
1 Unit = 95% to $417,000 1 Unit = 90% on High Balance 1 Unit Condo = 80% to $417,00 2 Unit = 85% to $533,850
2nd Home LTV 1 Unit = 90% to $417,000 1 Unit = 65% on High Balance
Appraisal only requires the After Improved Value Purchase LTV = Lesser of Sales Price + Renovation Cost or After Improved
Value Refinances LTV = Lesser of Payoff + Closing Cost + Renovation Cost or
After Improved Value Minimum/Maximum Renovation Cost
No Minimum amount Standard Maximum = 50% of After Improved Value Do It Yourself Maximum = 10% of After
Improved Value
FNMA HomeStyle
How does it differ from the 203(k)?
Robert Rauf 732-740-0175 NMLS# 248937
Eligible Repairs include Luxury items and improvements to “never occupied properties”…Builder bailouts
Ineligible Repairs include Construction of Outbuildings and AppliancesMortgage Insurance for LTV above 80%
– Standard MI Coverage– Essent, Genworth and UGIC– Essent has DTI Restrictions– Genworth max construction period is 120 days and doesn’t allow
for Do It Yourself– UGIC Primary Residence only and no Do It Yourself – Financed MI allowed– Split Premium is not allowed
All Non Do It Yourself transactions require one main General Contractor and GC must be licensed and carry $1 Million General Liability Insurance
Contractor can be a relative of borrower but cannot be the borrower’s employer or a company owned by borrower
FNMA HomeStyle
How does it differ from the 203(k)?
Robert Rauf 732-740-0175 NMLS# 248937
• Refinances only look at After Improved Value
• 2nd Home Purchases and Refinances• Contractors that are Relatives of Borrower• Purchases of partially completed/builder
bailout properties• MI Premium significantly cheaper then FHA • No Mortgage Insurance for LTV 80% and
below• Financed MI = 97% LTV to $417 and 90%
LTV on High Balance
203(k) vs. HomeStyle
When would I use the HomeStyle?
Robert Rauf 732-740-0175 NMLS# 248937
203k Standard 203k Consultant FNMA Homestyle FNMA Homepath
Occupancy Type Owner Owner Owner & 2nd Home Owner & 2nd Home
Max LTV 96.5% 96.5% 95% 95%
High Balance Loan Yes Yes Yes Yes
Max Repair Amount 35,000 No limit 50% of after improved Value
35% of after improved value or 35,000 which is less
Min Repair Amount None 5,000 None None
Mortgage Insurance Requirement
Always Always Only if LTV over 80% Never
Max # of Contractors 3 1 GC + 1 Specialty 1 GC + 1 Specialty 1 GC + 1 Specialty
Borrower Self Help Yes No Yes No
Borrower Contractor Relationship
NO NO Allowed Allowed
Type of Repair Allowed Non-Structural Both Both Both
Outbuildings NO Yes NO NO
Pools NO NO; 1,500 for repair Yes Yes
Building Additions NO Yes Yes Yes
Mold/Lead Paint removal
Yes Yes Yes Yes
Foundation Work NO Yes Yes Yes
Tear Down/Re-Build NO Yes NO NO
Robert Rauf 732-740-0175 NMLS# 248937
Toms River Team
Robert RaufMortgage Loan Originator, NMLS# 24893716 Madison Ave, Bldg. 2, Suite 2DToms River, NJ 08753Phone: 732-908-4868Cell Ph.: 732-740-0175Fax: [email protected]/RobertRauf
My Local Toms River Team:
Donna M. Dechert/Mortgage ProcessorO: 732.908.4879/ F:866-371-0280E:[email protected]
Clara Zawistowski/ Loan Officer Asst. O: 732.908.4866| F: 866.279.3310E: [email protected]
WHO WE AREFounded in 1989 and headquartered in New Jersey, HomeBridge Financial Services (Formerly Real Estate Mortgage Network) serves the lending needs of home buyers, home owners, real estate professionals and builders across the country. Our associates are passionate about fulfilling the American Dream and realize they are the key to unlocking the mortgage process.
BUSINESS PHILOSOPHY·We have an uncompromising determination to be guided by integrity and what serves our customers best.·Strive to exceed each customers expectations·Work to achieve excellence in everything we do, both inside and outside the company
PROFESSIONAL EXPERIENCE·Rob has been Lending in New Jersey since 1987·Licensed in NJ NMLS#248937·Member of the Ocean County Board of Realtors·Currently serves on multiple Committees of the OCBR and Board of Directors·Member of the Ocean County Business Association
PERSONAL·Resident of Toms River·Married, Father of two·Bachelors Degree in Economics Rutgers 1987·Assistant Scout Master Troop 30 Toms River, NJ
PRODUCTS·FHA Mortgages·FHA 203(k) loans, Consultant and Streamlined·VA Mortgages·Conventional Financing·Non-Conforming Jumbo Loans·Reverse Mortgages·Second Home Financing with as little as 10% down·100% USDA financing·NJHMFA bond programs (First Time Buyer)·PBA program·FNMA Homestyle Renovation Financing
SERVICES·FHA 203 (k) Concierge Dept.·Direct Lender·Seller/Servicer of FNMA and GNMA products·Marketing Department·Co-Branded Marketing