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ConvertingDistressed Properties
into Eco-Efficient Homes
Rick WilliamsCertified Green Building Professional
(831) 247 5573
Stormy Weather in Real Estate
48% of Listings are Distressed Properties
Buyers want the best deals!
Next Wave of Foreclosures
� Foreclosure Moratorium to end
� Six million homes in shadow inventory
� Option Arms & Alt A due to reset
� Banks & Brokers forced to buy back defaulted loans
� Conventional credit is tough
Storm of Opportunities
203K Renovation Loan
• $35,000 renovation funding included in first mortgage
AND
PG&E rebates
$1,500 to $4,000
AND
CAR’s R.E.A.P $250 credit towards energy audit
Profit Opportunities
� Purchase distressed properties
– 3.5% down' 30 year financing
� gift funds OK
� Non resident borrower OK
– Assumable mortgage on resale
� Renovate & Eco Energize
� New homeowners get rebates
� Loan limits to $729,750
203K Particulars
� 203K Streamline $35K improvements– Roofs, kitchen, bath, flooring
– HVAC, Insulation, PV, windows >> rebates
– No structural changes or additions
� 203K Standard No limit– Need consultant for additions & foundation work
� 203K Investor due in May (15% down)
– $5000 minimum for energy efficiency
� Can combine with EEM
Refinance Opportunity
� Refinance low equity homes
– 2.5% equity only
– Higher ratios allowed
– Non resident Co-Borrower
– Today’s low rates assumable
� Create comfortable homes
� Increase value
� Renewables →→→→ Near net zero
Eligible Properties
� Single Family detached
� Condos - Internal only
� 1 to 4 units. Owner Occ
� Mixed use Res/commer
� HUD REO
� Must have final permit for 1 year
� Redtag conversions OK
Potential 203K Buyers
� First Time Buyers
� Move up & move down
� Changing needs
� Occupant investors
� Discount shoppers
� All Prequalified
203K System: Steps Prior to Offer
� Buyers Preapproval
� Preliminary inspection
� Guesstimate budget
� Renovation Value Analysis
– Value “As Is”
– Renovation cost Guesstimate
– Final Value with Comps
� Present Offer with 203K– 25 day contingency & 60 day close
203K System: Steps to Submission
� FHA Home Inspection
� HERS Energy Audit ($250 credit from CAR)
� Scope of work: – Must do, Should do, Like to do
� Choose contractors
� Detailed contractor bids
� FHA appraisal (As Is & Finished Value)– Can loan to 110% of finished value
203K System: Steps to Closing
� Complete loan submission
� Conditional Approval
� Approval & Docs > COE
� Work completed within 6 months
� Contractors paid from escrow
� PG & E pays rebate to homeowners
Eligible Improvements
� Repair/Replacement of roofs, gutters
� Repair/Replacement/upgrade of existing HVAC systems
� Repair/Replacement/upgrade of plumbing & electrical systems
� Repair/Replacement of flooring
� Minor remodeling, such as kitchens & baths
� Painting, both exterior and interior
� Weatherization, including storm windows and doors, insulation
� EnergyStar appliances, stoves, ranges, refrigerators, washers /dryers, dishwashers & microwave ovens
� Septic & termite
� Disability Accessibility
� Connection to public water or sewage system
Green Updates
Needed Repairs
� Repair/replace/add exterior
decks, patios, porches,
sidewalks, driveways
� Basement finishing and remodeling,
� Basement waterproofing,
including mold removal
� Window and door
replacements and exterior wall
re-siding
Let’s Do It !!
� Build Contractor teams
� Educate buyers
� Show it on listings
Rick Williams
831 247 5573
rick@ ecoenergyloan.com
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