About Burlington County, NJ

So, I get questions all the time about this, and people always tell me, “Jeff, everything sounds great about FHA 203k mortgages, ...sounds like it’s the perfect loan for me...it does everything that I want it to do, BUT there can't be the perfect loan- there has to be something wrong!” And you're right- maybe not so much wrong, but there is a downside to anything, which is what I tell any client, realtor or contractor during our initial conversation.

From A Customer's Standpoint:

1. For customers, the interest rate is typically a little bit higher-- somewhere usually about a quarter to a half percent higher than you would get on the typical FHA loan.
2. The second one is that it can be a little more expensive. From an expense standpoint- there is a HUD certified FHA consultant who is involved. The FHA 203k Consultant fees can range anywhere from $400 dollars to $1,100 dollars depending on the cost of the rehab. In addition, there are re-inspection fees included for that must be paid when a draw is requested (fees fees are financed into the loan).

The cost of this loan is slightly higher than using a typical FHA 203b mortgage or conventional financing however these other financing types do not give you the flexibility to roll in renovation and rehab into your mortgage so there is a tradeoff. The pros far outweigh the cons for using a FHA 203k mortgage.

From A Realtor's Standpoint:

From a realtor’s standpoint, there aren't any downfalls. There really is not much that has to be done differently except for giving additional access of the property so that we can get the FHA consultant and contractors into the property. That's really the only thing that's going to change on the realtor standpoint.

From A Contractor's Standpoint:

From a Contractor’s Standpoint, as we spoke about in other blogs, the contractor doesn't get paid up front- they are paid on a draw schedule. The truth is, some contractors are going to work with FHA 203k loans and some aren’t. The one great thing about working with the FHA 203k loan is the contractor is going to get paid. He doesn’t need to worry that the money isn’t going to be there.

So, as I said, there are some cons to a FHA 203k mortgage but the pros far outweigh the cons when it comes to renovation financing. I hope that answers all of your questions. Please feel free to e-mail me with any additional questions at jonofrio@annie-mac.com.

We get A LOT questions that come in all the time and we try to answer as many of them as we can in blog posts so future customers will be able to see these posts and potentially have their questions answered up front.

Weather Conditions

One of our most recent questions was from a client in New Hampshire. The customer had a project where he was looking to put on an addition, which would require footers to be dug into the ground and, in order to do so, you obviously need to get into the ground. In New Hampshire during this time of year- you know, November, December, January- there is snow. Right now, they have already seen 21 inches of snow in New Hampshire. Now that doesn't mean that the ground is frozen, since all of the snow has melted, so there is that potential to get into the ground. The biggest question that came in was..."Can we do a FHA 203k in the winter time when we’re starting the project in New Hampshire?"...because in a situation like this, the rule is that we need to finish the project within six months.

Staying within the FHA 203k guideline of completion within 6 months...

Yes, we do want every project to fit within the FHA 203k guideline of six months. However, we’re not going to hold up a project either by trying to blame the weatherman, because, at the end of the day, neither myself nor my underwriter- nor our investors- know what the weather is going to hold.

Scenario:

We could end up having a really warm winter and the ground may never freeze, so we could really hold up a loan for that reason? Again, six months really takes us to the point where even if we had to start in April with the ground starting to thaw, we would just start it then have to rush the job. This is an extremely important reason why we talk to the contractors and make sure the expectations are set because, if we don't set expectations correctly, obviously there's going to be issues.

6 Months Exactly?

Another question that I always get asked by customers is whether the six month condition from the FHA is hard and fast? The truth is I have had jobs that have extended past six months. It’s important to realize that FHA does not find it favorable for a loan to extend past six months. The FHA does frown upon it and they look to us, as the lender, as to why it is taking longer.

Expect For The Unexpected!

There are just certain things we can't predict. We cannot predict weather. If there is a tornado in the area and it shuts down the job for two weeks because there’s no power, it is what it is. There’s nothing we can do, so FHA understands this and they’re willing to make concessions. If a contractor is not voluntarily doing the work, then that is a problem. In this scenario, they would come back to us and ask why we haven't taken the time to make sure we vetted that contractor correctly to know whether or not he could handle the job. It really is a case-by-case scenario, but the rule is that we are supposed to get all of the FHA 203k 's done within the six-month period.

Home for Sale By Owner in Mount Laurel, NJ 08054 - Flat Fee MLS Listing $395

5 Richland Dr Mount Laurel, NJ 08054 - Realtors welcome, buyer agent commission paid at MLS#5997882

5 Beds 4 Baths

Magnificent brick estate home nestled in an enclave of only 19 homes. 5 bds 3.5 ba 3 car gar and over 4200 sq ft. Grand 2-story foyer w/oak stairs and wrought iron railing. Hardwoods thru foyer LR DR PR FR and library. Gourmet kitch includes SS app granite cntrtps 42”cabs dbl ovens 8’ island brkfst bar and sep morning rm. Vaulted FR features balcony overlook gas FPw/marble surround and custom mantle. Library complete w/custom millwork and built-ins. Master ste includes tray ceiling window seat dbl walk-in closets and sit rm w/fireplace. Master ba includes jetted tub dbl sinks granite cntrtps shower and water closet. Fin basemt has an add 1500sq ft of living space w/custom bar FP exercise media and play rooms. Backyard boasts an inground heated cement pool w/raised jetted tub EP Henry patio and ext landscape. Over 200K in upgrades. New SS Frchdr frig and SS micro 12/2011.Newer 2nd flr carpeting and granite bath cntrtps 2010. Newer pool motor 5/2011.1yr home warranty.

If you are interested in this Home for Sale By Owner in Mount Laurel, NJ 08054- Flat Fee MLS Listing $395, please call 1-888-362-6543, enter the MLS#5997882 . You can make an appointment or ask any questions about the property. Realtors welcome, buyer commission is paid to any realtor. Please see additional listing details at Realtor.com featured by Realmart Realty.

If you have a Home for Sale in Mount Laurel, NJ 08054 and would like save up to 6% commission, we can list your home on the local MLS and Realtor.com for a low flat fee of $395. For more information please read the FAQ on Home for Sale By Owner in Mount Laurel, NJ 08054- Flat Fee MLS Listing. You will get the maximum exposure of the local MLS, in which thousands of local realtors will help you sell your home. You also reserve the right to sell your home by owner and pay no commission at all.

Please contact Realmart Realty for our texting special. All new orders will receive a free sign with Texting Service where buyers can get full listing details on their mobile phones instantly. Offers ends 05/30/2011, call now for more information about Homes for Sale By Owner in Mount Laurel, NJ 08054- Flat Fee MLS Listing $395.

Are you buying a home in Mount Laurel, NJ 08054 We will give you up to 2% of the purchase price of the property at closing if you choose to work with us. This is for all homes that are listed on the MLS. For more information, please read the Buying tips and FAQS.

Jack Yao - Realmart Realty info@realmartrealty.com, 732-727-2285

YES IT'S TRUE! The state of New Jersey allows REBATES for homebuyers. This is CASH in your pocket at the closing table. For more information on the rebate program, please read the New Jersey Law. This is not a government rebate. Please consult a tax professional about the rebate. In New Jersey commissions are negotiable.

Home for Sale By Owner in Shamong, NJ 08088 - Flat Fee MLS Listing $395

24 Meetinghouse CT Shamong, NJ 08088 - Realtors welcome, buyer agent commission paid at MLS#5994458

3 Beds 3 Baths

Beautiful 2 Story Colonial with front porch in a wonderful neighborhood. 3 large bedrooms and 2 1/2 remodeled bathrooms. 1 acre lot backing up to state lands. Newer floors, doors, all appliances included. Back deck and patio looking out at the woods..

If you are interested in this Home for Sale By Owner in Shamong, NJ 08088- Flat Fee MLS Listing $395, please call 1-888-362-6543, enter the MLS#5994458 . You can make an appointment or ask any questions about the property. Realtors welcome, buyer commission is paid to any realtor. Please see additional listing details at Realtor.com featured by Realmart Realty.

If you have a Home for Sale in Shamong, NJ 08088 and would like save up to 6% commission, we can list your home on the local MLS and Realtor.com for a low flat fee of $395. For more information please read the FAQ on Home for Sale By Owner in Shamong, NJ 08088- Flat Fee MLS Listing. You will get the maximum exposure of the local MLS, in which thousands of local realtors will help you sell your home. You also reserve the right to sell your home by owner and pay no commission at all.

Please contact Realmart Realty for our texting special. All new orders will receive a free sign with Texting Service where buyers can get full listing details on their mobile phones instantly. Offers ends 05/30/2011, call now for more information about Homes for Sale By Owner in Shamong, NJ 08088- Flat Fee MLS Listing $395.

Are you buying a home in Shamong, NJ 08088 We will give you up to 2% of the purchase price of the property at closing if you choose to work with us. This is for all homes that are listed on the MLS. For more information, please read the Buying tips and FAQS.

Jack Yao - Realmart Realty info@realmartrealty.com, 732-727-2285

YES IT'S TRUE! The state of New Jersey allows REBATES for homebuyers. This is CASH in your pocket at the closing table. For more information on the rebate program, please read the New Jersey Law. This is not a government rebate. Please consult a tax professional about the rebate. In New Jersey commissions are negotiable.

Another Great Use!

Buying and rehabbing a multi-family unit property can be done using the FHA 203k loan. I’ve done a few of these loans and they are absolutely great! I’m currently doing one right now -- it’s a four-unit property and it's a big job. The FHA 203k loan limits, which you can check out here, are much higher as the units go up. So, the total rehab cost for this four-unit property is over $600,000. It’s an enormous project and it's one of the really cool things the FHA 203k allows you to do. In this situation, this customer is going to live in one of the units and, ultimately, he is going to be collecting income from the other three units. So, by doing this rehab, he is going to be able to bring in a good portion of income on a yearly basis. It’s one of the great features of the FHA 203k loan. The maximum amount of units you can do is a four-unit property. You can obviously do two units; you can do three units- it all just depends on what is available in your area. FHA 203k loans are greatly for these types of properties, but the important part to remember is with any FHA 203k loan, it is for primary residences only. So you must, YOU MUST live in one of the units. This is extremely important because, again, the FHA 203k loan is not for investors. Investors may be coming down the road, but for now, this is not for investors, it is only for primary residences only.

Reserves With 3-4 Unit Properties

Another thing to keep in mind is that with three and four unit properties is you must have a certain amount of reserves. The amount of reserves is three months, which, again, is liquid or retirement funds- anything which would be considered assets in some sort of bank account or IRA. Basically, something that we can show that they would be able to tap into in case they would run into problems, but, again, this is only required for three and four-unit properties The three and four units must self-support as well, which means the rental payments must be able to sustain the mortgage on its own, so that’s another important feature to keep in mind when you're talking about a three or four unit property.

Two unit properties are just like a one unit.

But, again, there are little special nuances when we’re talking about multi-unit properties. There's a lot of areas in the City of Philadelphia, for one. The large project that I'm doing right now, the $650,000 rehab, is in Jersey City. It's really close to the subway, which allows somebody to get back and forth from New York which is great because there's a lot of people in New York that rather come to New Jersey for the cheaper rent and the ability to save a little bit money. Those are other good reasons why those properties are so popular in such areas.

Supplement Your Income!

The FHA 203k mortgage allows for some great different types of properties and allows you to really make some money. As a landlord who lives there, an occupying landlord, you're able to make some additional money each month and that’s a great thing to supplement your income. And in these times- there are more people renting, so it's great for anybody who's interested in adding a little bit of extra money in their pocket and building equity you should consider doing an FHA 203k loan on any multi-unit family property.