Lender Issues Firm Commitment. Further, on a refinance transaction, when a large amount of existing debt i. The HUD appraisal will be considered acceptable for use by the lender if. If all draw inspections are not made, monies left in escrow must be applied to reduce the mortgage balance. You might even go so far as to write the k paperwork requirements into the contractor agreement. I even let my real estate agent talk me into going with someone local
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However, this does not mean that the condominium project, as a whole, can only have four units or that all individual structures must be detached. A project might consist of six buildings each containing four units, for a total of 24 units in the project and, thus, be eligible for Section k. Similar to a project with a condominium unit with a mortgage insured under Section c of the National Housing Act, the condominium project must be approved by HUD prior to the closing of any individual mortgages on the condominium units.
To purchase a dwelling and the land on which the dwelling is located and rehabilitate it. To purchase a dwelling on another site, move it onto a new foundation on the mortgaged property and rehabilitate it. To refinance existing indebtedness and rehabilitate such a dwelling.
To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property and the loan proceeds other than rehabilitation funds must be available before the rehabilitation begins. To purchase a dwelling on another site, move it onto a new foundation and rehabilitate it, the mortgage must be a first lien on the property; however, loan proceeds for the moving of the house cannot be made available until the unit is attached to the new foundation.
Properties with separate detached units are acceptable, however, a newly constructed unit must be attached to an existing unit to be eligible under k.
Examples of eligible improvements are listed below. This list is not all inclusive. Structural alterations and reconstruction e. Changes for improved functions and modernization e. Elimination of health and safety hazards including the resolution of defective paint surfaces or lead-based paint problems on homes built prior to Changes for aesthetic appeal and elimination of obsolescence e. Installation of new plumbing fixtures is acceptable, including interior whirlpool bathtubs.
The well or septic system must be installed or repaired prior to beginning any other repairs to the property. Lots smaller than these sizes usually have problems in the future; however, the local HUD Field Office can approve smaller lot size requirements where the local health authority can justify smaller lots.
The installation of a new well or the repair of an existing well used for the primary water source to the property can be allowed provided there is adequate documentation to show there is reason to believe the well will produce a sufficient amount of potable water for the occupants. A well log of surrounding properties from the local health authority is acceptable documentation.
Refer to HUD Handbook Roofing, gutters and downspouts. Flooring, tiling and carpeting. Energy conservation improvements e. Major landscape work and site improvement e. The correction of grading and drainage problems is also acceptable. Tree removal is acceptable if the tree is a safety hazard to the property. Repair of existing walks and driveway is acceptable if it may affect the safety of the property.
Fencing, new walks and driveways, and general landscape work i. Improvements for accessibility to a Disabled Person e. New free standing range, refrigerator, washer and dryer, trash compactor and other appurtenances used appliances are not eligible. Interior and exterior painting. The installation of a new swimming pool is not allowed. Luxury items and improvements that do not become a permanent part of the real property are not eligible as a cost of rehabilitation.
Barbecue pit; bathhouse; dumbwaiter; exterior hot tub; sauna, spa and whirlpool bath; outdoor fireplace or hearth; photo mural; installation of a new swimming pool; gazebo; television antenna; satellite dish; tennis court; tree surgery.
Additions or alterations to provide for commercial use are not eligible. To improve the thermal efficiency of the dwelling, the following are required: Insulate ceiling areas where necessary. For additional information and requirements, refer to 24 CFR Part Each sleeping area must be provided with a minimum of one 1 approved, listed and labeled smoke detector installed adjacent to the sleeping area.
In order to determine the maximum mortgage amount, the k valuation analysis consists of two separate determinations of value. A separate appraisal Uniform Residential Appraisal Report may be required to determine the as-is value.
However, the lender may determine that an as-is appraisal is not feasible or necessary. In this instance, the lender may use the contract sales price on a purchase transaction, or the existing debt on a refinance transaction, as the as-is value, when this does not exceed a reasonable estimate of value. Further, on a refinance transaction, when a large amount of existing debt i.
On a refinance, the borrower may have substantial equity in the property to assure that no further down payment is required on the new loan amount. In some cases, the borrower will not have an existing mortgage on the property. Another way of establishing the as-is value is to obtain a copy of the local jurisdiction tax valuation on the property. The HUD appraisal will be considered acceptable for use by the lender if. If the HUD appraisal is insufficient, the DE Lender may order another appraisal to assure the market value of the property will be adequate to make the purchase of the property feasible.
For a HUD-property, down payment for an owner-occupant or non-profit organization is three percent of the accepted bid price of the property and percent financing on all other costs. Homebuyers who purchase a property with cash can refinance the property using k within six 6 months of purchase, the same as if the buyer purchased the property with a k insured loan to begin with.
Evidence of interim financing is not required; the mortgage calculations will be done the same as a purchase transaction. Cash back will be allowed to the borrower in this situation less any down payment and closing cost requirement for the k loan. A copy of the Sales Contract and the HUD-1 Settlement Statement must be submitted to verify the accepted bid price as-is value of the property and the closing date.
The homebuyer may decide to employ an architect or a consultant to prepare the proposal. The homebuyer must provide the lender with the appro priate architectural exhibits that clearly show the scope of work to be accomplished. The following list of exhibits are recom mended, but may be modified by the local HUD Field Office as required. A Plot Plan of the Site is required only if a new addition is being made to the existing structure.
Show the location of the structure s , walks, drives, streets, and other relevant details. Include finished grade elevations at the property corners and building corners. Show the required flood elevation. Proposed Interior Plan of the Dwelling. Show where structural or planning changes are contemplated, including an addition to the dwelling. An existing plan is no longer required. Work Write-up and Cost Estimate.
Any format may be used for these documents, however, quantity and the cost of each item must be shown. Also include a complete description of the work for each item where necessary. The Rehabilitation Checklist in Appendix 1 of Handbook Cost estimates must include labor and materials sufficient to complete the work by a contractor. Homebuyers doing their own work cannot eliminate the cost estimate for labor, because if they cannot complete the work there must be sufficient money in the escrow account to get a subcontractor to do the work.
The Work Write-up does not need to reflect the color or specific model numbers of appliances, bathroom fixtures, carpeting, etc. The consultant who prepares the work write-up and cost estimate or an architect, engineering or home inspection service needs to inspect the property to assure: This refers to insurance of the k mortgage prior to the rehabilitation period.
A mortgage that is a first lien on the property is eligible to be endorsed for insurance following mortgage loan closing, disbursement of the mortgage proceeds, and establishment of the Rehabilitation Escrow Account.
The mortgage amount may include funds for the purchase of the property or the refinance of existing indebtedness, the costs incidental to closing the transaction, and the completion of the proposed rehabilitation.
The mortgage proceeds allocated for the rehabilitation will be escrowed at closing in a Rehabilitation Escrow Account. This account is not an escrow for the paying of real estate taxes, insurance premiums, delinquent notes, ground rents or assessments, and is not to be treated as such.
The net income earned by the Rehabilitation Escrow Account must be paid to the mortgagor. The method of such payment is subject to agreement between mortgagor and mortgagee. The fee inspector is to use the architectural exhibits in order to make a determination of compliance or non-compliance.
When the inspection is scheduled with a payment, the inspector is to indicate whether or not the work has been completed. The first draw must not be scheduled until the lender has determined that the applicable building permits have been issued. A ten 10 percent holdback is required on each release from the Rehabilitation Escrow Account. The total of all holdbacks may be released only after a final inspection of the rehabilitation and issuance of the Final Release Notice.
The lender or its agent may retain the holdback for a maximum of 35 calendar days, or the time period required by law to file a lien, whichever is longer, to ensure that no liens are placed on the property.
At the discretion of the HUD Field Office, the cost estimate may include a contingency reserve if the existing construction is less than 30 years old, or the nature of the work is complex or extensive. For properties older than 30 years, the cost estimate must include a contingency reserve of a minimum of ten 10 percent of the cost of rehabilitation; however, the contingency reserve may not exceed twenty 20 percent where major remodeling is contemplated.
If the utilities were not turned on for inspection, a minimum fifteen 15 percent is required. The contingency reserve account can be used by the borrower to make additional improvements to the dwelling.
A Request for Change Letter must be submitted with the applicable cost estimates. However, the change can only be accepted when the lender determines: If the mortgage exceeds the appraised value less the statutory investment, then the contingency reserve must be paid down on the mortgage principal. If a borrower feels that the contingency reserve will not be used and he wishes to avoid having the reserve applied to reduce the mortgage balance after issuance of the Final Release Notice, the borrower may place his own funds into the contingency reserve account.
In this case, if monies are remaining in the account after the Final Release Notice is issued, the monies may be released back to the borrower. If the mortgage is at the maximum mortgage limit for the area or for the particular type of transaction, but a contingency reserve is necessary, the contingency reserve must be placed into an escrow account from other funds of the borrower at closing. Under these circumstances, if the contingency reserve is not used, the remaining funds in the escrow account will be released to the borrower after the Final Release Notice has been issued.
Funds not to exceed the amount of six 6 mortgage payments including the mortgage insurance premium can be included in the cost of rehabilitation to assist a mortgagor whether a principal residence or an investment property when the property is not occupied during rehabilitation. The number of mortgage payments cannot exceed the completion time frame required in the Rehabilitation Loan Agreement. The lender must make the monthly mortgage payments directly from the interest bearing reserve account.
Monies remaining in the reserve account after the Final Release Notice must be applied to the mortgage principal. Approval of Non-Profit Agencies. A non-profit agency, before it can be approved as an eligible mortgagor and obtain the same mortgage amount as available to owner-occupants on Section k mortgages, must demonstrate its experience as a housing provider to HUD and meet all other requirements described in HUD Handbook It must also be able to provide satisfactory evidence that it has the financial capacity to purchase the properties.
The mortgage amount, when added to any other existing indebtedness against the property, cannot exceed the applicable loan-to-value ratio and maximum dollar amount limitations prescribed for similar properties under Section b. The Mortgage Payment Reserve is considered a part of the cost of rehabilitation for determining the maximum mortgage amount. The value is defined as the lesser of: For purchases with k financing: For refinances under the k program: The cost of rehabilitation may also include the supplemental origination fee which the mortgagor is permitted to pay when the mortgage involves insurance of advances, and the discounts which the mortgagor will pay on that portion of the mortgage proceeds allocated to the rehabilitation.
Exemption of the Market Value Limitation. The k regulations allow for a waiver of the market value limitation, which allows the appraiser to go outside the targeted area to obtain the value of comparable properties. Requests must include documentation that the following conditions are present: The mortgage is eligible for an increase of up to 20 percent in the maximum insurable mortgage amount if such an increase is necessary for the installation of solar energy equipment.
The solar energy system's contribution to value will be limited by its replacement cost or by its effect on the value of the dwelling. Energy Efficient Mortgage Program. Under the FHA EEM Program, a borrower can finance into the mortgage percent of the cost of eligible energy efficient improvements, subject to certain dollar limitations, without an appraisal of the energy improvements and without further credit qualification of the borrower.
To be eligible for inclusion into the mortgage, the energy efficient improvements must be "cost effective," i. Get Pre qualified Now. We're committed to helping you refinance with the lowest rates and fees in the industry today.
Welcome to the official site of A Plus Mortgage. We are a full service mortgage company based in Cooper City, Florida. We also serve the surrounding cities in Broward County. Whether you are buying a home or refinancing in the zip code of , we can help you realize your dream of home ownership or save you money when getting your new lower monthly payment.
We offer a wide range of refinance options, designed to best meet the needs of local borrowers. If you're looking for cash out, or to just get a better rate and term, we can assist you.
We offer the following Refinancing Programs:. What makes A Plus Mortgage unique is that we offer the following niche programs as well: Contact A Plus Mortgage today to discuss your mortgage loan options, and find out which loan program will best suit your needs.
A Plus Mortgage Griffin Rd. Suite Cooper City, Florida Phone: We've been helping customers afford the home of their dreams for many years and we love what we do.