Category Archives: Rehab Loans

Foreclosure Rehab Program Do Not Have To Be A MN First Time Home Buyer

The Homeownership Opportunity Program (HOP) provides short-term, temporary financing for the purchase and rehabilitation of vacant properties in, or in imminent danger of foreclosure, and for properties in a foreclosure impacted area. HOP loans are paid off by standard first mortgage products when the rehabilitation is completed.

Borrower Eligibility
To qualify, borrowers must:
Intend to owner-occupy the property;
Meet income limits (total income less than $96,500 – adjusted annually);
Be pre-approved for a standard first mortgage with a loan amount sufficient to pay off the HOP loan when the work is completed.

Property Requirements
Cannot be in industry standard mortgage condition, and;
Must be a single family detached, zero-lot-line townhome, owner-occupied duplex, manufactured home on permanent foundation, and be;
– Vacant as a result of foreclosure, or
– In imminent danger of foreclosure with a negotiated short-sale, or
– Located in a foreclosure impacted area

MN Housing Fix Up Fund

Fix-up Fund
The Fix-up Fund is a statewide program that offers affordable, click here for daily low fixed rates home improvement loans.

Eligibility Requirements:

  • Household income at or below $96,600 (the income limit may be waived if the improvements are being made for the accessibility of a family member with a disability).
  • Property must be owner-occupied.
  • Single family homes, duplexes, triplexes or four-plexes are eligible.

Loan Features

  • Hire a contractor or do the work yourself.
  • Maximum loan term of 10 or 20 years based on loan amount.
  • Loan amounts from $2,000 to $35,000.
  • A higher loan amount may be available if the improvements are being made for the accessibility of a family member with a disability.

Eligible Home Improvements with the Fix-up Fund
Most improvements to the accessibility or energy efficiency of a home, or general repairs are eligible, such as:

  • windows
  • insulation
  • new furnace
  • central air conditioning
  • electrical wiring
  • new roof
  • garage
  • septic repairs

In addition to energy-saving upgrades, homeowners may also finance renewable energy improvements. These include solar thermal, solar electric and wind turbines/generators.

Ineligible improvements
Swimming pools, hot tubs, gazebos and other recreational or entertainment facilities. Mobile homes are not eligible to receive Fix-up Fund financing unless they are fixed on a permanent foundation and taxed and financed as real property.

 

Homeownership Opportunity Program (HOP)

The Homeownership Opportunity Program (HOP) provides short-term, temporary financing for the purchase and rehabilitation of vacant properties in, or in imminent danger of foreclosure, and for properties in a foreclosure impacted area. HOP loans are paid off by standard first mortgage products when the rehabilitation is completed.

Borrower Eligibility
To qualify, borrowers must:
Intend to owner-occupy the property;
Meet income limits (total income less than $96,500 – adjusted annually);
Be pre-approved for a standard first mortgage with a loan amount sufficient to pay off the HOP loan when the work is completed.

Property Requirements
Cannot be in industry standard mortgage condition, and;
Must be a single family detached, zero-lot-line townhome, owner-occupied duplex, manufactured home on permanent foundation, and be;
– Vacant as a result of foreclosure, or
– In imminent danger of foreclosure with a negotiated short-sale, or
– Located in a foreclosure impacted area

Mortgage Financing city required repair escrow

Don’t allow minimal property condition challenges stop you from utilizing traditional non rehab 203ks FHA financing.
Often times you will see a property listing stating cash/conventional only with minimal derogatory property conditions.
As a small bank we are able to escrow for city required repairs that the city mandates to be made prior to closing and or FHA required work orders called on an appraisal.
Often times on bank owned REO the seller will not perform or allow work to be done to the home prohibiting a successful closing. If the work orders are minimal I will escrow for the work to be completed after close providing you as the buyer sign an escrow agreement of 1.5x a reputable contractors bid. You have 7 days to finalize the repairs as your funds will remain at our bank until final inspection has cleared.

Minnesota FHA 203ks Mortgage MN Housing Rehab

Tired of hearing no you can’t buy the house you just fell in love with, it’s not FHA approved?

Our CASA 203ks loan with $5,000 in down payment assistance may be the answer. We can escrow up to $12,000 in required repair. This program is perfect for neglected homes with deferred maintenance.  Gain an instant increase in value from the start!

All FHA loans have a minimum down payment requirement of 3.5%. It is an easy calculation when you are considering a straight purchase, but when you are doing a 203ks, it is 3.5% of the total acquisition (purchase price) plus renovation cost.

For a 203ks, a HUD approved cost consultant must be involved for several reasons. They ensure that after renovation, the home will meet the minimum FHA standards. They will verify that you are hiring competent contractors and the contractors are doing renovation according to applicable codes. Finally it’s an effort to reduce fraud. FHA may be insuring loans for people who are claiming they will do renovations to a property and the home may not need the repairs and/or the renovation funds may not be spent as the lender and FHA anticipate.

As soon as you identify a property you’d like to make an offer on, talk to the contractors you plan to use and start getting proposals. We also will need to acquire copies of their contractor license, resume, and a certificate of liability insurance, so ensure all contractor’s you are working with are properly licensed and insured BEFORE you spend time with them getting estimates.

Allowable improvements for Single Family, Townhomes, HUD approved Condos (interior only) or Duplex

  • Roof work including gutters & downspouts
  • Upgrade of existing HVAC systems
  • Upgrade Plumbing & Electrical Systems
  • Replacement of Flooring
  • Painting of both exterior and interior
  • Basement finishing and remodeling, which does not involve structural repairsÂ
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding

Inelligible Improvements

  • Major reconstruction or new construction
  • Repairing structural damage
  • Anything requiring blueprints
  • Landscaping
  • Anything that will take longer than 3 months
  • Anything that will take longer than 30 days to start

FHA Work Orders City Required Escrows

Don’t allow minimal property condition challenges stop you from utilizing traditional non rehab 203ks FHA financing.
Often times you will see a property listing stating cash/conventional only with minimal derogatory property conditions.
As a small bank we are able to escrow for city required repairs that the city mandates to be made prior to closing and or FHA required work orders called on an appraisal.
Often times on bank owned REO the seller will not perform or allow work to be done to the home prohibiting a successful closing. If the work orders are minimal I will escrow for the work to be completed after close providing you as the buyer sign an escrow agreement of 1.5x a reputable contractors bid. You have 7 days to finalize the repairs as your funds will remain at our bank until final inspection has cleared.