FHA 203k Loans: What Are They? What Are the Benefits?

Original Article Was Posted on www.Zillow.com by Andrea Smolin

FHA 203k Loans: What Are They? 

What Are the Benefits?

Getting a Mortgage Loan for a Fixer-Upper: A Primer on FHA 203k Loans

The idea of buying a fixer-upper and turning it into your dream abode can seem so perfect -- every nook and cranny just to your specifications! The reality, however, can be harsh. When you realize how much it will cost to remodel, you often also realize that you can't afford it. Or you find out that a lender won't give you a loan because the home is considered “uninhabitable” as it is. That's where an FHA 203k loan comes in.

An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. Here's how it works: Let's say you want to buy a home that needs a brand-new bathroom and kitchen. An FHA 203k lender would then give you the money to buy (or refinance) the house plus the money to do the necessary renovations to the kitchen and bathroom. Often the loan will also include: 1) an up to 20 percent “contingency reserve” so that you will have the funds to complete the remodel in the event it ends up costing more than the estimates suggested and/or 2) a provision that gives you up to about six months of mortgage payments so you can live elsewhere while you're remodeling, but still pay the mortgage payments on the new home.

Which repairs qualify?

There are two main types of FHA 203k mortgage loans. The first is the regular 203k, which is given for properties that need structural repairs such as a new roof or a room addition; the second is the streamlined 203k, which is given for non-structural repairs such as painting and new appliances. Among the other repairs that an FHA 203k will cover: decks, patios, bathroom and kitchen remodels, flooring, plumbing, new siding, additions to the home such as a second story, and heating and air conditioning systems. The program will not cover so-called “luxury” improvements such as adding a tennis court or pool to the property.

How much money can you get?

The maximum amount of money a lender will give you under an FHA 203k depends on the type of loan you get (regular vs. streamlined). With a regular FHA 203k, the maximum amount you can get is the lesser of these two amounts: 1) the as-is value of the property plus repair costs, or 2) 110 percent of the estimated value of the property once you do the repairs. With a streamlined loan, you can get a loan for the purchase price of the home plus up to $35,000. To determine the as-is value of the property or the estimated value of the property post-repair, you may need to have an appraisal done. You will be required to put down 3.5 percent, but the money can come from a family member, employer or charitable organization.

What kinds of properties qualify?

Qualifying homes include: a one- to four-family home that has been completed for a least a year; a home that has been torn down, provided that some of the existing foundation is still in place; a home that you want to move to a new location. The home cannot be a co-op, but some condos are eligible. Your property will also have to qualify under the usual FHA requirements. For example, its value cannot exceed a certain maximum amount, which depends on where you live.

What are the pros and cons of these loans?

The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you get decent interest rates (note that the interest rates and discount points will vary by 203k lender, so it's important to make sure that you're getting a good deal on the loan).

The downsides are that not all properties qualify, there are limits on the funding you can get and applying for the loan isn't easy. For example, to apply for the loan you may need to hire an independent consultant to prepare the exhibits required (to get the loan, you have to provide a detailed proposal of the work you want to do and cost estimates for each item). For more information on 203k loans, check out.

Joe Barbee

Elite Realtors of Georgia

www.WarnerRobinsHouseHunter.com

Warner Robins Home Values Benefit from Spring Ritual

The first day of spring has come and gone, which has made many homeowners start planning their ritual seasonal maintenance. Spring is also the traditional launch of the busy season in real estate, when safeguarding Warner Robins property values can become a less abstract matter.

Because water damage is Public Enemy #1, homeowner checklists should always highlight three points:

First: The Roof

As soon as March’s lion turns a bit more lamb-like, it’s time to get out the ladder to survey roof damage. Leaves, twigs or other storm debris that have clogged gutters during the weather months can allow moisture to penetrate the roofing and below, in the worst case triggering mold or rot. Look for holes or rust in the flashing or metal seals around roof joints, chimneys, skylights or any other structures that penetrate the roof.

Second: Down Under

Now it’s time to go down. While spring rains are still falling, put fresh batteries in your flashlight and head to the furthest reaches of basement or underneath the house to check for puddles. Even when it’s raining outside, the your home’s foundation should remain dry. When it comes time to sell, Middle GA homes’ property values are seriously affected by water damage, some of which might not appear upstairs until later. If you see signs of trouble, it’s time to call an expert.

Third: the Exit Routes

That is— the drains. Backed-up plumbing is a nuisance you can avoid if you clean all the drains two or three times a year. Don’t forget the garbage disposal, either. My trick is to pour in equal parts salt, baking soda and vinegar, followed 30 seconds later by two quarts of boiling water. Then give the mixture a chance to work overnight before running water again.

With the sales market poised for spring action, the protection careful homeowners have given to their own local property values will make a material difference. But you don’t have to be selling your home for this time of year to trigger the maintenance efforts your property may need. Got a property-related question? Give me a call!  478-978-3428

Joe Barbee

Elite Realtors of Georgia

478-978-3428

www.WarnerRobinsHouseHunter.com

www.WarnerRobinsRealtor.com

Real Estate Update - Abingdon Green Subdivision 2014 - Warner Robins

Abingdon Green Subdivision - 2014 

Homes sold - 3

Avg List Price - $130,433

Avg Sale Price - $125,716

Avg Days On Market - 130

Foreclosures - 1

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Homes Currently For Sale - 2

Avg List Price - $137,200

Avg Days On Market - 166

Foreclosures - 0

Curious about your home's Current Market Value?

Call Us Today!!

Joe & Jenny Barbee

The Barbee Team @ Elite Realtors of Georgia

www.WarnerRobinsHouseHunter.com

478-978-3428

478-333-6008

105 Hampton Meadows - Bonaire, GA - $1,275 -Awesome All Brick Home For Rent

* All Brick Home 

* 3 Bedrooms

* 2 Full Baths

* 1,670 Square Feet

* 1/4 acre lot

* Like New Condition

* Large Fenced back yard

* Great Subdivision. 

* Minutes from Robins AFB

* Close to shopping and schools. 

Click Here for ONLINE Pictures and info: 105 Hampton Meadows

Call today before this one gets away!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

Warner Robins Rental Homes Allowing Pets: a Win-Win for Everyone!

Many Middle Ga landlords are automatically less than enthusiastic when they hear a prospective tenant’s question, “Do you allow pets?” Small wonder. The specter of damage from unsupervised four-footed co-inhabitants is a real possibility (despite the assurances of their doting masters). 

Yet that kind of automatic landlord reaction might turn out to actually result in a questionable business decision. Some undeniably real benefits can accrue to those who open their WarnerRobins rental home to tenants who own pets.

Don’t believe it? Here are just some of the reasons why renting a home to a strong applicant with a well-cared-for, healthy pet can benefit both parties:

1.      Widens the Number of Potential Candidates    Allowing pets into a rental home materially increases the eligible applicant pool, giving an area rental home owner more latitude to select the best applicant. How many more become eligible? I checked this, and came up with jaw-dropping numbers. 47% of households own at least one dog (not to mention the 95,000,000 million owned cats). The numbers prove what we know already: a huge number of Americans are ga-ga over their pets.  

2.      Respectful Tenants     A Firepaw.org survey comparing pet owners with non-animal-owning tenants showed that, on average, damage done to rental properties is about equal between the two groups. The takeaway from that is the biggest surprise: just because pets are living in your rental home in Warner Robins doesn’t mean that the property will suffer. It seems that grateful pet-loving renters just try harder to keep the property in good condition. They do the worrying for you.

3.      Higher Rent     Renters with pets can be willing to pay some additional rent for the privilege of keeping their furry loved ones with them. Pet-owning renters are not likely to shy away from Middle Ga rental home listings that specifically allow pets — even when a “pet rent” or other fee is part of the bargain.

If you are considering buying an income property next year, I provide resources for my clients every step of the way. I hope you’ll feel free to contact me anytime with your Warner Robins real estate questions.

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Warner Robins Relocation Planning Should Put Children First

Relocation is seldom simple, but it can be particularly challenging for children. Each year more than $25 billion is spent on relocation, frequently made necessary because of professional reasons. While many adults are able to settle into their new surroundings quite easily, children often have a harder time making the transition.  But parents can have a major impact on whether that happens. If you’re planning a relocation to the Warner Robins Area this winter there are ways you can make the process easier on the children.

Before the move

This is the perfect time to bring the kids into the relocation process. By involving your children as much as possible as early as possible, you will minimize the sense of powerlessness that can be the source of much anxiety. Take them to see their new town before the moving process is underway ­— and before the moving vans arrive, involve them in packing their favorite toys (and artistically decorating the cartons that are their very own)! In the best circumstances, unpacking will become like an extra birthday celebration; the new room, more thoroughly theirs than even the old one. The more a child feels an important part of your relocation plans, the more likely he or she are to experience it as empowering.

Just afterwards

Immediately after the dust has settled, set aside a few days helping them get to know the local area.  Take them to nearby child-centered attractions, explore the parks, help them learn about

 Warner Robins fascinating history. When they begin school, they’ll find they are able to regale their new schoolmates with local lore even the locals didn’t know!

Settling in

What you know (but the kids may not) is that new best friends are going to show up sooner or later. Sooner is better — so encourage them to join sports teams, actively get to know the neighbors, and make a point of attending any of the Houston County civic events.

If you’re planning a relocation to Warner Robins this winter, I’d be delighted to offer a full portfolio of community resources. Don’t hesitate to contact me today to talk about your move!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Renting a Warner Robins Home: Key Miscues to Avoid

   With housing prices on the rebound, it’s easy to see why some Middle Georgia homeowners find buying an additional property an increasingly attractive possibility. Getting into the landlord business offers the appeal of a growth investment coupled with the possibility of a favorable cash flow situation.



That said, make no mistake about it: renting a home in Warner Robins is its own business enterprise. Becoming a landlord means making business decisions that carry elements of risk as well as reward. When renting a home in Warner Robins, there are a number of common — but avoidable — first-time landlord mistakes:



Fair Housing Violations


From the moment you begin marketing your income property, the language in your ad can easily run afoul of the fair housing rules that prohibit discrimination. Avoid phrases that single out any particular group or profile, such as “family-friendly,” “suitable for a couple,” or “singles only.” Since violations can run up to six figures, make sure your ad simply describes the property and the neighborhood in generic terms — and be prepared to accept the first qualified applicant who meets your terms.



Credit Report Mistakes


Another common mistake when renting a home in Warner Robins is to fail to adequately qualify applicants. Today, accepting credit reports supplied by the applicants themselves is a gamble. Run credit reports yourself (including an eviction check for every applicant over the age of 18). You want to see the history of ALL applicants who will be living in your Mid Ga income property.



Security Deposit Mistakes


When it comes to the security deposit, taking too much – or not enough – is another common first-timer misstep. Too little and you won’t have enough protection; too much, and you risk violating state regulations (with the possibility of jeopardizing your right to use any of the funds!).

Renting a Warner Robins home can be an outstanding wealth-building venture, but your responsibilities as landlord must be taken seriously. For anyone unsure about legal requirements, hiring a professional property management agency can make good business sense. I’m here with recommendations for my clients on these and all other matters that accompany your local real estate opportunities.

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Basics of Buying Foreclosed Homes in Warner Robins

   You may have seen the reports — and they are correct — that the number of new foreclosures has dropped almost everywhere throughout the country. Although the Mortgage Bankers Association’s report about the drop in non-seasonally adjusted foreclosure starts might indicate otherwise, this year, sharp-eyed buyers can still find any number of foreclosed homes in Warner Robins. For those whose goal is to find an appreciably nicer home at a lower-than-average price, a few basics shed light on the process.



   Short sales differ from foreclosures. Although the sale price may be a good deal less than what is still owed on a loan, it may be more or less than the actual value of the home. A foreclosed home in Houston County is one that is actually owned by the bank holding the underlying loan — with the previous homeowners already having moved on.



   Success in the foreclosure realm means saving money by buying Warner Robins foreclosed homes — and it means being aware of the motives of the lender. First, any bank will typically offer foreclosed homes on an as-is basis. To keep losses in check, no repairs will have been made on the property. Some homes may be in fine condition, but others will not. That’s why it’s so essential to be willing to pay for an inspection on the property: it’s the only way to know exactly what you are getting into before you sign on the dotted line.

   Unless you have prior success in buying Warner Robins foreclosed homes, it is universally recommended that you enlist a buyers agent to help throughout this process. An agent can advise you whether or not the property value is in line with the market for comparable properties in comparable condition. While you can work with the bank on your own, it is advantageous to have an experience professional to assist at the bargaining table.



   If you are interested in buying foreclosed homes in Warner Robins this year, why not contact me today to discuss your search parameters? The values really are out there to reward the patient — and anyone willing to put in a dollop of elbow grease!

www.WarnerRobinsHouseHunter.com

Joe Barbee
Associate Broker
Elite Realtors of Georgia
478-978-3428 - Direct Cell Phone
478-333-6008 - Office
www.WarnerRobinsRealtor.blogspot.com 

Skilled Warner Robins Property Managers Earn Their Keep!

   You are buying a second home: this will be more than a sizeable investment — by any measure, it’s a considerable personal achievement as well.



   That second home may be a family retreat, a vacation property you will be renting out (at least part time); or a pure income-producing renztal. When a realistic appraisal says that you won’t be able to devote much time and attention to your new holding, the way to fill that gap is to locate an experienced Middle Ga Property Manager. 

   As you will learn, it’s a specialized field. According to the latest studies, the median income for property managers nationwide tops $80,000 per year — a pretty trustworthy real world indicator that what they do has substantial value. If your second home is going to do duty earning additional income, the last thing you want is to face a commitment that competes with your full-time profession. Yet when tenants experience problems, dealing with them right away is a ‘stitch in time’ that does more than fostering good will. It can wind up saving money!



   Your new property is a business, and like any, needs cash flow supervision. A vacation home, for instance, may from time to time incur unforeseen end-of-stay housekeeping costs which could require an extra payment. Your Warner Robins Property Manager will handle this kind of problem for you (in fact, he or she probably made sure your rental contract foresaw this in the first place!).



   Whether or not you buy your second home for profit, you want it to be more of a joy than a burden. A professional property manager delivers insulation from the smaller details, and corresponding relief from the stress of  2 am phone calls, maintenance worker noshows, and all the other day-to-day management details.
If you are fortunate enough to be in a position to buy or sell a second home in the Warner Robins area, I offer the kind of first-tier real estate service that will get you what you are looking for. Contact me anytime for reliable Property Management Services.

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com

Landing Residential Rentals When Credit Scores Intrude

Would-be tenants for the best Middle Ga residential rentals can find it tough going when a tarnished credit report is part of their financial profile. As the economy continues its slow-mo bounce-back, many individuals and families who have weathered the worst of the downturn find themselves saddled with credit scores that are unpleasant reminders of lost jobs, cutbacks, and the rest.


Even if some of the most desirable residential rentals in Warner Robins are plainly within your ability to pay, earlier credit slipups can create a roadblock. A low score is a problem for landlords. They may sympathize, but still must decide between you and other applicants who, by the numbers, present a more prudent choice

.


There is no shortcut that will guarantee that a credit-challenged applicant will land his or her choice of residential rentals 100% of the time, but I can offer some insights into the traits that most often reward others in the same boat. They’re pretty straightforward:


Unblinking honesty. Address your credit history — and the reasons it’s still disappointing — in a personal discussion with the decision-maker (landlord or agent). Just about everyone understands that life isn’t always fair, that everyone has made some bad judgments, and that success usually requires learning from a failure or two. Since your credit score will never go unnoticed, take the issue on directly and without embarrassment.

Persistence. Be willing to comb through the available Middle Ga residential rentals for as long as it takes to land one that you are happy to call “home.” It really is true that toughing your way through multiple rejections builds character. When you feel discouraged, take the day off — but then bounce right back and go at it again!

Maturity. Rebuilding a strong credit score doesn’t just take time, it takes the ability to delay gratification. Even if it turns out that some of the best Warner Robins residential rentals are out of reach right now, if you are willing to forego the temptations of a charge card lifestyle, eventually you will succeed. And if I can be helpful anywhere in the process, do give me a call!

www.WarnerRobinsHouseHunter.com

Joe Barbee

Associate Broker/Property Manager

Elite Realtors of Georgia

478-978-3428

TheBarbeeTeam@gmail.com