Sunday, July 26, 2009

Pinnacle Hill Glendale, AZ - FHA 203k Rehabilitation Loan

The FHA 203K Rehabilitation Loan was started as a tool to help the revitalization of neighborhoods and communities throughout Glendale, Arizona and the United States. This loan program offers borrowers the resources to rehabilitate their home located in the Pinnacle Hill community in Glendale, AZ that may be in need of limited repairs and/or upgrades without exhausting their savings. This can be used for either the purchase of a fixer-upper or the refinance of a home they currently occupy. One single loan is used to pay for the purchase (or refinance) and the cost of renovating the home.

The FHA 203(k) loan is available to borrowers of all income levels who plan to occupy their house in the Pinnacle Hill area. This loan also opens the door for many Arizona first-time homebuyers and applicants with less than perfect credit, while still allowing for low down payments. Properties eligible for this product include any single family residences, condominiums, manufactured homes, townhouses and properties with one to four units located in the Pinnacle Hill area in Glendale, AZ.

The Streamlined 203(k) program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required. The repair costs can be up to $35,000 and there is no minimum requirement. (***Please note that there are also 203(k) loan programs available without a maximum repair cost amount and additional improvements capabilities.)

The following is a list of some of the eligible improvements and/or repairs:

••- Repair/Replacement/Upgrades of roofs, gutters, HVAC systems, plumbing, electrical systems and flooring
••- Minor remodeling of kitchens and bathrooms
••- Purchase and installation of appliances
••- Painting - exterior and interior
••- Weatherization including insulation, weather stripping, storm windows and doors
••- Window and door replacement and exterior wall re-siding
••- Lead based paint stabilization and abatement of lead based paint
••- Repair/Replace/Addition of exterior decks, patios and porches
••- Repair to existing swimming pools up to $1,500
••- Repair/Replacement of septic system and wells
••- Accessibility improvements for persons with disabilities
••- Finishing/remodeling of basements, not including structural repairs

The actual cost of the renovation is based upon the contractors' accepted contracts specifying the scope of work, cost of materials and labor and timeframe. All repairs must be completed by a contractor within 3 months of the closing date. Borrowers are required to have the necessary expertise and experience to perform work. Please feel free to contact the Krushinsky Team at 623-594-7600 for any additional questions related to the FHA 203K Rehabilitation Loan in Pinnacle Hill.

Saturday, July 11, 2009

Is This Really Arizona?


These are all the things that come to mind when you normally mention the name Arizona. Having been born and raised in Arizona, there are many more things to do here. At the time of writing this article it's 113 degrees outside in Phoenix. This is the time of year to find a nearby lake like Lake Pleasant, Canyon Lake or Saguaro Lake and enjoy some water activities. There is also a newly built water park, Wet-N-Wild, that just opened in July to take the kids to for keeping cool. Another popular activity often referred to as "Arizona's Floating Picnic" is tubing down the Salt River.

During the winter months, you can enjoy skiing at Arizona Snobowl in Flagstaff and Sunrise Park Resort in Greer. These facilities are also open in the summer months for activities such as hiking, mountain biking and just enjoying nature on a scenic lift ride. Oak Creek Canyon and Sedona provide nice weekend getaways for golfers, nature enthusiasts and even power shoppers. Sedona is often referred to as "Red Rock Country" because of the beautiful red-rock monoliths named Coffeepot, Cathedral and Thunder Mountain that surround the city.

A popular local hangout is the newly constructed Westgate, in Glendale, located adjacent to the Arizona Cardinals stadium. Westgate offers activities such as dining, shopping, a fountain park for the kids, and a movie theater.

Known primarily for the "Grand Canyon" this beautiful state has much more to offer for someone looking to purchase a home in Phoenix. With real estate prices in some Phoenix neighborhoods dropping to prices not seen since 1997 and favorable interest rates, now may be the time to take advantage and buy the home you have always dreamed about. First-time homebuyer loan programs and the $8,000 tax credit is also currently available to applicants who qualify.

Monday, July 6, 2009

Appraisal and Property Requirements - FHA Loans

1: Home Inspections: Borrowers are encouraged to obtain a detailed home inspection of the property. Borrowers should research home inspector's qualifications and designations to ascertain that they feel comfortable with the individual they hire. I recommend asking your Realtor for a referral of a qualified Home Inspector.

2: Repairs and Alterations: Deficiencies, required repairs, alterations and/or required inspections must be reported within the appropriate section of the applicable appraisal reporting form. (See Mortgagee Letter 2005-48 and 2005-34)

Required Repairs: Required repairs are limited to those repairs necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants, A.K.A. the three S's:

Safety: protect the health and safety of the occupants
Security: protect the security of the property (security for the FHA insured mortgage.)
Soundness: correct physical deficiencies or conditions affecting structural integrity

Properties in Poor Condition: If the subject property is in such poor condition that it may be cost prohibitive or impractical to bring it up to FHA's minimum property requirements, the appraiser should recommend rejecting the property and contact the Lender before continuing with the assignment. If continuing:

Complete the appraisal on an "AS IS" basis, clearly marking the report as recommended for rejection for Section 203(b) and provide reasons for the rejection;
Provide a list of all major deficiencies and state that the list should not be considered all-inclusive. Additional items may be required before acceptable for FHA Insurance; and
Provide photographs of deficiencies to support recommended action.

3. Code Enforcement for Existing Properties: As stated in HUD Handbook 4150.2 HUD has neither the authority nor responsibility for enforcing code. This rests with the local municipalities.

4. Clearing Conditions on Existing Homes

All repair items required by the appraiser or underwriter must be inspected and the clearance documented.

A professionally licensed, bonded, registered engineer, licensed home inspector or appropriately registered/licensed trades person, as applicable, must provide documentation that all deficiencies have been acceptably corrected upon completion of repairs. "As applicable" has been determined to mean any individual who the lender deems to be qualified, which might be the appraiser.

Professionals as defined above may use their company's forms and letterhead to make the certifications. Appraisers and Compliance Inspectors are to use the Compliance Inspection Report, form HUD-92051. The individual signing Section II must be the person who actually performed the inspection. Section III or IV, as appropriate, is to be signed by the Direct Endorsement Underwriter.

Mortgagee Certification: When a Mortgagee Certification is used to clear minor conditions the HUD-92051 is not required.

Mechanical Certifications: Please see: Heating & Electrical section of this manual.

5. Refinances: Standard refinances require a complete appraisal with deficiencies and repair conditions reported. Although HUD does not require completion of the repairs on a streamline refinance, except lead-based paint repairs, the lender may require completion of repairs. A streamline refinance may be insured with or without an appraisal. Please see:Handbook 4155.1, Rev. 4 Chapter 1

6. Appliances: The Valuation Protocol (page D-26 of Appendix D, Handbook 4150.2) requires the appraiser to note the appliances that are present in the home at the time of inspection and whether the appliance is considered personal property or part of the real estate. The protocol further directs the appraiser to treat non-functioning appliances/equipment as deferred maintenance in the valuation process.

The manner in which an appliance is attached to the dwelling would determine whether or not an appliance should be considered part of the real estate. In some real estate markets, it may be typical and customary for certain appliances to convey with the real estate. In these situations, those appliances should be considered real estate and treated as such in the valuation of the property.

In some cases, such as that of REO properties, all or some of the appliances may be missing and there may be damage to the floor, wall or ceiling finish as a result of the removal. Depending upon the magnitude of the damage, the appraiser is expected to treat the damage to the home as deferred maintenance and reflect such in the conclusion of value. Missing appliances must be addressed by the appraiser in the valuation process, particularly when the comparable sales included a full complement of working appliances.

In cases where appliances are missing and minor repairs may also be needed, lenders are encouraged to have the borrower take advantage of the Streamlined 203(k) loan product, which has no minimum repair cost threshold and is designed to cover such improvements/replacements.