Real Estate Blog

Rehabilitation Loan - FHA 203K To The Rescue!

How many of you have been looking for the right home, the perfect home? Only to find challenges with each property.  It may be an older kitchen & bath(s), an unfinished basement, or in some cases, a complete renovation is needed to make the property habitable.

Through the FHA (Federal Housing Administration) you may be eligible to utilize the HUD 203K program.  This mortgage instrument allows home buyers to purchase their "dream home" (even though it may not look like it,  yet).

Consider this, you've found what appears to be an attractive home on a street that appeals to you.  It has almost all that you want in a home, as you gaze upon it from the street with your agent.  You then enter the home, only to realize, it requires serious updating; the electrical is older, kitchens & baths are dated and there's only two bedrooms (you need three).  If you could stay within your budget and make the necessary changes, would you consider purchasing it?

Example:  You received a pre-approval letter indicating $500,000 purchasing power and the property lists for $425,000.  You have a clever agent with good negotiation skills, you receive an accepted offer at $400,000.  By using an FHA 203K loan, you could borrow more than the purchase price, and apply the additional funds to improve the property, prior to moving in.

This incredible FHA program works well with buyers purchasing short sale,  distressed, foreclosure, fixer-uppers, etc., requiring updating or repair work prior to moving in. Home buyers must meet some requirements for this program.  The property must be owner occupied, a primary residence and have minimum 640 FICO score among other criteria.  The property being purchased can be almost completely removed, down to the foundation.  However the initial foot-print of the property must remain intact and built upon.

Examples of Home Improvements Allowed:

• Kitchen and Bath(s) remodeled
• Windows and Doors (Energy Efficient)
• Weather Stripping, Gutters and Roofs
• Basement remodeling
• Decks
• Room Additions

Meet with your mortgage professional for more information on this program; keep in mind that not all mortgage people are qualified to discuss this program.  Please be sure to speak with the appropriate person to determine if you qualify.  This program can make the difference for a home buyer not able to find the perfect home, but has the vision to improve upon an existing home, to meet one's needs.

There can be reasons not buy a home; however with the use of the FHA/HUD 203K loan, individuals are seeing the opportunities in fixer-uppers.

by James C. Trano, REALTOR® - Century 21 Adams - 857.209.6060

FHA 203K Program

According to this past Sunday’s New York Times (Jan.8) in their end of the year round-up of mutual funds, real estate funds topped the list of all sector funds with a 4th quarter return of  14.8%.  For the year, they returned 8%, which is second only to utility funds which returned 10% for the year.   Not bad for a sector (approx. 300 funds) that is constantly barraged with “the sky is falling” media news. 

What I find myself reminding people over and over again is that real estate is heavily influenced by the specific locale.  Some towns have weathered the recession quite well, currently are doing quite well, and are likely to continue to show good activity and price stability. 

In general, the towns closer to Boston have shown a robust housing market that is relatively stable.  Meanwhile, outside routes 128 and 495, it’s a different story; be aware that each market is different.

By Adam Rosenbaum, Realtor® 617.694.8553

 2011 was another good year for Single Family home sales in Arlington, MA where home sales in general outpaced the  previous YTD sales as of December 31, 2011.   Arlington remains steadfast in the ever-changing housing market.

After reviewing the year end numbers, there is one clear message, Single Family home sales are outpacing condos and multifamily sales.  Total number of homes sold has decreased from 2010, approximately down 5%.  That said the, median and average sales prices have increased, upwards of 4%, offsetting the total home sales.  Multi-Family and Condo markets experienced drops this past year, after a large increase in 2010 believed to be spurred on by the first time home buyer tax incentives from Spring 2010.  The incentive allowed many renters on the verge of buying to take the plunge into home ownership.  This past year could be considered a market correction.   

Click here for Sold Statistics in Arlington, MA

The Housing Market

The lower than average jobless rate in the Boston area and the impact of low interest rates continue to drive growth in this marketplace.  Other housing markets, Western Massachusetts & beyond are facing upside-down mortgages and a higher rate of bank owned properties. In a recent article from Bloomberg, Federal Reserve Chairman Ben Bernanke made comments about the weakness of the housing market and the importance of its recovery to bettering the overall economic recovery.  In the article he intimates the need for protection from foreclosure, more opportunity for home buyers and addresses the surplus of foreclosed properties.

In recent years market prices were effected by the sale of foreclosed and short sale properties.  Fortunately in the Boston housing market, there was very little impact.  According to an article by the National Association of Realtors® in March 2009, 49% of total market sales in the US were foreclosures and short sales, however as of October 2011 the numbers decreased to 28%.

Arlington remains a desirable community for home buyers with its diverse housing inventory, schools, parks, access to public transportation and the proximity to Boston and the 128 belt. As a result the Arlington real estate market is vibrant while other markets remain stagnant.

Click here for "2011 Sold Statistics" Vs. "Average of 2005-2010 Sold Statistics"

By James C. Trano, Realtor® 857.209.6060

Recently, two members of our office started a program airing on Arlington's public access channels, via Comcast, RCN & Verizon.

The "Under Agreement - Talk Real Estate" show is dedicated to bringing valuable real estate information to prospective Buyers and Sellers. We'll be speaking with Mortgage & Legal professionals regarding the transaction itself; informing consumers about various rules, regulations, financing & legal issues. 

In addition, we'll be speaking with Service Professionals; talking with Pest Inspectors, Home Inspectors, Electricians, Contractors, etc. It's important to get the most information available before you commit to a large financial obligation and/or the tax implications of selling your home.

We look forward to answering your questions online via email or during our show!

Cheers!

Adam & James 

*Click on the image below

Lexington Mid-Rise... $289,000

Historic location & just one block to Lexington Center! This top floor, two-bedroom unit features 2 levels of living with full set of stairs (not spiral), 2 full bathrooms, a separate dining area, private 11"x9" deck, catherdral ceilings and skylight windows. Recently installed oak hardwood floors and fresh paint throughout. Owner added two small ramps that can be removed. Other amenities include plenty of parking, Bike Path, MBTA bus line and convenient to Rt 2 and Rt 128.

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