From the desk of Jenn

Friday, September 2, 2016

FHA 203 K Loan Information

Core Property Consultants has been in contact with numerous professionals regarding topics that relate to the 2016 Flood Event. We have compiled in-depth, factual information to further assist you with your unanswered questions. Jennifer along with other professionals in the Housing Industry will be writing several articles addressing your questions on what to expect post flood and housing.

FHA 203(k) allows homebuyers and homeowners to finance either the purchase or a refinance of a house and the cost of its rehabilitation through a single mortgage. The loan includes purchase or refinance and rehabilitation cost in one transaction. We provide acquisition or refinance funds at closing in the same manner as traditional mortgage finance. At the same closing, we deposit renovation funds in an escrow account similar to that used in a traditional construction loan. The FHA 203k loan is a fully funded loan with one closing. Repairs are completed subsequent to the closing. There is no requirement for the property to be habitable on the day of closing. As repairs are completed and inspected, draws are disbursed from the Renovation Escrow Account to fund the project. The Borrower must use a Contractor to complete the repairs. The Borrower cannot complete the repairs regardless of their expertise.

For a flooded home, basically, they would refinance their home for the value of what the house is worth after the repairs. The process takes about 45-60 days because there are so many people involved and so many more steps than just a regular transaction.

There are extra fees & expenses with 203 (k) such as permits, inspections, etc.

The borrower is pre-qualified for the maximum loan amount based on the sales price plus renovation cost including contingency and renovation fees with minimum down payment of 3.5%.

For example:

These are figures used just for an example for a refinance:

Flooded house has an existing mortgage balance of $200,000

Contractor comes out and bids the $40,000 in repairs, then with all the other fees you have:

1. Subtotal of Repairs and fees: $45,760

a. Total cost of repairs: $40,000

b. Contingency Reserve*(10%): $4,000

c. Inspection fees: $500

d. HUD Consultant fees: $500

e. Permits: $100

f. Origination fee: $660

2. Estimated closing costs & pre-paid items $7,500

Existing debt plus repairs = $245,760

Appraised value (subject to repairs and improvements): $260,000 (this is done at the beginning)

* A contingency reserve is used to cover unexpected expenses. The reserve can be 10% to 20% of labor and materials only.

New loan –

$260,000 value – 3.5% down payment of $9,100 = $250,900

The repairs are done after closing and the $40,000 is put into an account that is drawn from to pay the contractor as he does the work.

Thanks,

DIRECT- 225-248-4055 CELL- 225-202-8731

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Do you need post-flood information? Comment on this blog or email me at jhutchinsonrealtor@gmail.com

Wednesday, August 17, 2016

MY THOUGHTS ON THE WORDS OF OTHERS- LOUISIANA FLOOD 2016

I am so blessed as my husband finally got to come home. Only seen him for a few hours before he passed out & he will be leaving out again at 6 am. Most of you know but those that do not, he is a Baton Rouge Fire Department Captain & is with the swift water rescue division through USAR. I could not sleep as I was worried about getting all of his clothes washed, bags repacked, care package, etc. ready for him. Once I finished, I sat to look at Facebook and I keep seeing several topics popping up that I want to see put to rest.

The lack of media coverage- I am okay with them not covering this event as we don't need Fox & CNN. The news crews would only get in the way, tell half truths & make comments that would be inaccurate. With all the loss this state has suffered, we do not need to hear what news anchors have to say that do not live here nor experienced what we have in the last week. I'm fine with listening to WAFB or WBRZ news because this is their home as much as it is ours.

Argument over if this flood was worse or not than Katrina - Who cares??? A natural disaster affects individuals that have suffered a loss, period. How dare anyone compare heartache, exhaustion, loss of home & vehicles, entire cities destroyed, etc. The two situations are the same. The pain and heartache are the same. The disbelief and shocked is the same. I find it insulting to hear someone say Katrina was worse and we don't understand. We do understand because we watched what was happening to New Orleans. We didn't experience loss but it seemed so real to all of us. We prayed for New Orleans, we grieved for them & a multitude went there and helped them. We took in evacuees and doubled our population We had centers set up everywhere hearing their personal stories of devastation. My husband was there for a year or longer assisting New Orleans & the stories he told me were unimaginable. Now we are living the nightmare they experienced and I'm so grateful that our fellow N.O. neighbors are coming to assist us. I have personal friends in New Orleans that have contacted me saying we understand your pain. Not once did they say we had it worse, however, there is some that have said to others on social media that their situation was worse than ours. When I looked in the face of some of my friends today, standing in their homes throwing everything they own to the road, that was enough for me to say, Baton Rouge, surrounding Parishes and New Orleans have experienced the same suffering.

The Federal Government and Barak Obama is not helping- We do not need their help. We are Louisiana Strong!! We have and can always take care of us, period. We have the heart of gold,unfathomable strength, amazing courage & of course, southern hospitlitaity. When you have a group of people with these traits, you don't need anyone else. You don't let others interfere with something positive. We made it this far without them and will continue surviving without them on our own in this remarkable state we love.

Louisiana should have never be built or we are crazy for living here- This statement has been said by others in different states and I have seen a social media post from a gentleman that lives here saying this. I will correct this real quickly for you with a few facts.

We supply an enormous amount of seafood being the biggest producer of crawfish in the world supplying 90%. We grow cotton, soybeans, cattle, sugarcane, poultry and eggs, dairy products, and rice. We generate chemical products, petroleum and coal products, processed foods and transportation equipment, and paper products.
In 2014, Louisiana was ranked as one of the most small business friendly state, that is something to be proud of.
We are at the mouth of the Mississippi river which is the largest volume shipping port in the Western Hemisphere and the 4th largest in the world. It is also, the largest bulk cargo port in the world. Pretty impressive.
We have been nicknamed " Hollywood South" because we play a huge role in the movie industry.
We have our own coffee, tabasco, fish fry, gumbo mixes, king cakes, etc that get shipped worldwide because honestly we know how to cook and the rest of the world knows it too.
Louisiana has an abundance of petroleum and natural gas, ranking fourth in petroleum production and is home to about 2 percent of total U.S. petroleum reserve.
Our natural gas reserves account for about 5 percent of the U.S. total and the world's fourth largest gas field with some wells initially producing over 25 million cubic feet of gas daily

This is just some of the many wonderful attributes we do. We are known for entertaining tourist as we had 28.7 million tourist in 2015. They come for the culture, the food, the scenery and they all leave saying we are the nicest group of people they have ever meet.

Of course, we can not forget that we have the best college football team, LSU and we are very proud of the talented players we watch every year.

So if you are the in the group of people saying we shouldn't live here, should have never built, then please do not enjoy the fruits of our labor because we work too hard to have others criticize us with their tacky comments. I do know when another state has a natural disaster, we will be the first to grieve for you and not once judge your location.

My last thought is, I am one of those that feel guilty & blessed that I did not receive water in my home. It is the strangest feeling of mixed emotions I have ever had to experience. My heart is in pieces for everyone else, my prayers are with you and I am here to help anyone at any time through this process of healing. We will rebuild and resume in this great state of ours.

BE STRONG, LOUISIANA STRONG!!