Renovation Loan Marketing Plan. Market Summary How are Renovations Financed? (and why is a...

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

Contact:

Marti Greeley

Cell: 719-459-5260

Email: martigreeley@comcast.net