Foreclosures in Nassau County, Suffolk County and the NY Metro area continue to increase due to the struggling economy. As a result, homes become neglected over time and develop situations that subsquently require a restoration company to perform repair work related to water damage, mold and many other structure situations. Initiating necessary foreclosure repairs for a property can be accomplished by a homeowner applying for a mortgage related to the 203(k) Program.
203(k) Mortgage
The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), administers various single family mortgage insurance programs like a 203(k) mortgage. These programs operate through FHA-approved lending institutions which submit applications to have the property appraised and have the buyer's credit approved. These lenders fund the mortgage loans which the Department insures. HUD does not make direct loans to help people buy homes.
One Mortgage Loan
When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods.
The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established.
It is important that a qualified restoration contractor familiar with the 203(k) program is selected to conduct the restoration process.
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Advanced Restoration Corporation is a full service property damage restoration company that has the abiltiy to execute all necessary repairs to a property that qualifies for a 203(k) loan.
For more information on FHA 203(k) loans and how Advanced Restoration can partner with you, please contact Gary Matzelle at (516) 903-4107.
For more information on FHA 203(k) loans and how Advanced Restoration can partner with you, please contact Gary Matzelle at (516) 903-4107.
