HOMESTYLE RENOVATION Look at the possibilities
HOMESTREET: WHO ARE WE? Based in the Northwest, HomeStreet Bank if one of the largest community banks in the Northwest and Hawaii. HomeStreet began in 1921 as Continental Mortgage and Loan Company, offering financing for commercial real estate and home mortgages as a mortgage banker broker. HomeStreet evolved into a full service bank in 1986, further expanding its products and services. In the mortgage business for over 90 years, HomeStreet provides its customers with a level of stability and continuity rare in today s banking world. We ve always stayed focused on what we believe is most important: building long-term relationships with our customers and providing ongoing support to our communities. HomeStreet has consistently been recognized by the federal government as Outstanding under the Community Reinvestment Act.
WHO AM I? 12 years within the Mortgage Industry. State Certified Homebuyer Educator. Specializes in Renovation and Construction Loan. Current with the First Time Homebuyer Programs available today. Homeownership creates stability for families, builds communities and is the greatest source of personal wealth. Because of this, all mortgages are not created equal and it s important to me to understand a buyer s personal goals and help achieve them. My service doesn t stop at loan closing, therefore, I m available long after to offer assistance and advice. Kriss Parnell NMLS#174928
WHY RENOVATION?! Inventory is low and the perfect home may not be available. Great way to increase equity! Great way to cut energy costs! Provide a healthy and safe home the minute your buyers move in. No more deferred maintenance. Show less homes and devote more time to new clients. CREATE THE PERFECT HOME!
WHAT IS A HOMESTYLE RENOVATION MORTGAGE? The Homestyle Renovation Mortgage is a single-close CONVENTIONAL loan that enables borrowers to purchase a home that may need renovation, or refinance the mortgage on their existing home, and include the existing funds into the loan balance. The loan amount is based on the ascompleted of the home rather than the present value. One Loan to Purchase (or Refinance) and Renovate a Home
QUICK FACTS Conventional Fannie Mae Guidelines. Owner Occupied, Second Home and Investment. 95% LTV on a 1-unit Owner Occupied. 30 YR and 15 YR Available. Standard Private Mortgage Insurance Rates. No MI with 20% down. Maximum Loan Amount $417,000
ELIGIBLE PROPERTIES Owner-Occupied 1-4 Units. Second Home 1 Unit. Investment Properties 1 Unit. Condos, Co-Ops and PUD. *Borrowers cannot have more than 4 financed properties.
ELIGIBLE REPAIRS RENOVATIONS MUST: Be permanently affixed to the property. Add value to the property. FOR EXAMPLE: Interior renovation or improvements. Fences. Decks. Landscaping. In-Ground Swimming pools. Fannie Mae has few limits on the type of work it covers with the HomeStyle Renovation Mortgage. The only requirements are that renovations must be permanently affixed to the property and add value to it. The program does not otherwise specify the types of improvements that can be financed.
PROGRAM DETAILS No minimum renovation amount. Maximum renovation amount limited to 50% of the ascompleted value. Reconstruct from the foundation up. HUD Consultant not required. Pest and dry rot report not required unless provided by borrower or referenced by appraiser. Feasibility report required with work over $75,000. Maximum 2 contractors = NO general contractor required. 3 or more contractors = General contractor required. 6 months to Final Distribution. Work complete in 5 mths and 1 mths for final inspection and disbursement.
COMPARISON TO HOMESTYLE Conventional Loan Purchase Price $350,000 5% down $17,500 Loan Amount $332,500 Purchase price + Renovation HomeStyle Renovation $350,000 5% Down $17500 Loan Amount $332,500 Interest Rate 4.5% /4.698% APR Interest Rate 4.625% /4.836% APR Seller Paid $9000 CC/Prepaids $2882/$10031 Cash to close $21,413 PAYMENT $2064 Seller Paid $9000 CC/Prepaids $4448/$10048 Cash to close $22,996 PAYMENT $2088
HOMESTYLE TO 203 K Purchase price + Renovation HomeStyle Renovation $350,000 5% Down $17500 Loan Amount $332,500 Purchase price + Renovation 203 K Loan $350,000 3.5% down $12,250 Loan Amount $343661 Interest Rate 4.625% /4.836% APR Interest Rate 4.125% /5.772% APR Seller Paid $9000 CC/Prepaids $4448/$10048 Cash to close $22,996 PAYMENT $2088 Seller Paid $9000 CC/Prepaids $5410/$4641 Cash to close $13301 PAYMENT $2421
THE PROCESS Get Pre-approved Interview Contractors. Contractor to submit questionnaire and resume. Find A Home. During Inspection period, meet with Contractor, Inspector and optional HUD Consultant. Contractor submits bids. Appraiser performs appraisal using bids to complete a Subject to Renovation value.
THE PROCESS Lender Review/Loan Processing Loan Approval Loan Closing. Construction Begins. Releases from Construction Escrow Account for Draw Disbursement. Completion of Work/Final Inspection.
LISTING AGENT BENEFITS The Listing Agent Advantage: Great way to move your listings. Educating other agents and potential buyers about the custom home option may add value to your listing presentation. This may help you market a home in a desirable neighborhood that has been perceived to be unsalable. You can guarantee the seller they can close without requiring work orders to be completed. Commissions are paid when the loan closes, before any work begins on the property. Repeat and referral business for you from satisfied sellers!
SELLING AGENT BENEFITS The Selling Agent Advantage: Expand the home buying options your client considers when you talk about the Renovation loan. Commissions are paid when the loan closes, before any work begins on the property. Buyers more apt to purchase quicker when not looking for perfection. No post-closing hassles for the agent. You choose your level of post-closing involvement with the process. The average time to close this loan is 45 days after a complete file is submitted to underwriting. Repeat and referral business for you from happy clients!
BUYER BENEFITS Low down payment and interest rates Built in Equity Contractors Paid When Work is Completed Upgrade the home your way. Refinance existing mortgage to improve your home
ONE STEP CONSTRUCTION A true One Step construction loan! This product enables you to do a custom construction project with one loan. You pay interest based on the Note rate during the course of construction that is calculated on the total amount of draws made to the date of interest calculation. Upon completion of construction the loan converts to a permanent loan with fully amortizing payments over the remaining term. Large renovations ($150,000 minimum) of properties are allowed.
GENERAL GUIDELINES 10% down payment. Owner Occupied and Second Homes Only. No Investment Properties, Multi-units. No Kit Homes.. 41% debt to income ratio. 700 credit score.
FHA 203K - RENOVATION The 203 K follows traditional FHA guidelines. Minimum credit score 620. 3.5% down on purchase price + repairs. Non-traditional Sources of Down Payment. Max. Loan Amount in Portland Area $362,250.
ELIGIBLE PROPERTIES Owner Occupied Only. 1-4 Units. Manufactured Homes. Condos. * restrictions apply. Mixed Use properties. 5-7 unit properties if the renovation is to create a 1-4 unit.
ELIGIBLE REPAIRS Structural alterations Reconstruction Improve appearance Eliminate obsolescence Repair/replacing well and/or septic Roofing Siding Gutters and downspouts Landscaping Kitchen Renovations Bathroom Renovations Heat and Air Conditioning systems Replacement windows and doors Finish Basements Waterproofing Plumbing and Electrical upgrade Appliances Floor and Wall covering New garage ** Reconstruct from the foundation up Site improvements ADA Modifications Additions **
OUR BUYERS MR. & MRS. F. T. Homebuyer Sissy and Junior
THANK YOU! Questions? I appreciate the opportunity to talk with you today! Feel free to contact me with questions. Kriss Parnell- NMLS # 174928 503-997-9419 Kriss.Parnell@HomeStreet.com