One World Realty in Jacksonville Florida
Charles Gaulden

FHA Changes on FHA 203k Renovations

FHA Changes – January 1, 2014 – Perhaps the most notable FHA change we have seen in years will occur Jan. 1, 2014. The maximum loan limit for FHA loans in Jacksonville, FL (and surrounding counties) will be lowered to $304,500. The counties include Duval, Clay, Saint Johns, Nassau and Baker. NOTE – This goes into effect with FHA case numbers assigned after Dec. 31, 2013 so anyone on the fence needs to make a decision in the next week.

When is the appraisal ordered on a FHA 203k or Fannie Mae Renovation loan? We do not order the appraisal until the detailed Scope of Work is completed and signed by the buyer and the contractor. The appraisal is performed Subject-To the After-Improved value. On FHA 203k you get up to 110% of the After-Improved value which means a 10% buffer. All repairs are done AFTER CLOSING.

How is the down payment calculated on a FHA 203k loan? The minimum 3.5% down payment is calculated off the sales price of the house plus the cost of rehabilitation or repairs. Example: $100,000 sales price + $15,000 repairs = $115,000 x 3.5% = $4,025. A buyer can certainly choose to have a larger down payment but these are the minimums.

While every renovation loan can present a different scenario for inspections, process etc. we receive many questions for the basic premise of the product. Here is a short, generic summary of a renovation loan on an “As-Is” property:

Home goes under contract “As-Is”

Buyer has home inspection, WDO inspection, etc.

Items are identified that MUST be addressed for the home to meet minimum property standards AND the buyer decides what improvements he/she WANTS to make on the home.

A general contractor provides a detailed Scope of Work with line items breaking out labor and materials for each item.

The appraisal is ordered – The Scope of Work is uploaded for the appraiser who includes it in the appraisal and assigns value based on the work being done. THE WORK IS NOT DONE UNTIL AFTER CLOSING.

  • The loan closes. The renovation monies are put in escrow with our draw center. Some FHA loans pay 50% of the costs right at closing.
  • When the work is complete, an inspection is ordered to ensure the work was done in workmanlike manner. In addition, a final title update is done to ensure there are no liens on the property before the contractor is paid the remaining funds.
  • Will Fannie Mae make repairs one of its REO HomePath properties?
    Yes and No. Typically, listings by Fannie Mae are As-Is properties which is why most often we use either a FHA 203K, Conventional renovation loan or a HomePath Renovation loan to address the property issues. However, there are isolated instances when Fannie Mae will address some major concerns that affect the health/safety/liveability of the home. The challenge is two fold: Fannie Mae must get at least 3 estimates before performing the work which generally leads to significant delays. Also, you are counting on the asset manager to decide who performs the repairs and thus the quality of the work – ie – Cheapest is Best. Solution – write the contract As-Is and let the buyer include ALL of the repairs/updates in his/her renovation loan.

For Sale For Sale For Sale Home – Buy a Home In Jacksonville Fl – FHA 203k Short Sale Home

For Sale For Sale For Sale Home – Buy a Home In Jacksonville Fl – FHA 203k  Short Sale Home

Looking to Buy A Home that Need a Little TLC.. 10365 Shelby Creek North JACKSONVILLE  FLORIDA 32221 For Only.

This Home is a Great Candidate For FHA/HUD 203k Renovation Program.

Upgrade the Kitchen with New Cabinets and Counter Top. New Tile Floor in The Kitchen and, All New Appliances.

New Shingle Roof, Exterior Painting and Interior Wall Painting.

$ 84,900 on The Westside on Jacksonville Fl  .. Renovation Special


Call Me Today for a Showing …(904) 348-0452


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Homes For Sale Jacksonville, Fl – Short Sale Homes in Jacksonville, FL

Homes For Sale – Buyer Makes an Offer To Purchase a Short Sale

 When a Buyer Makes an Offer To Purchase a Homes For Sale That is a Short Sale Home it is a Process that requires carefully planning by The Realtors and Home Buyers.

The Property in question needs to be investigated for Value to make sure that his Home Buyers is not paying to much for the Property in question.

Once the Home Buyers decide that they want to Make an Offer on a Property that is a Short Sale there are more Stressful considerations that much be considered in this type on Transaction.

First Hurdle. It may take up to 45 to 90 Days just to get a Short Sale Approval from the Sellers Lender.

Second Hurdle. The Home Buyers must understand that the Seller Lender may not want to Pay for All of the Sellers expenses that are tried to the delinquent bills that are associated with the Homes For Sale that is Short Sale Property.

Example: Homeowner Association Fee, All the delinquent Property Taxes, and other Fees associated with All The Homes For Sale – Houses For Sale in Jacksonville, Florida that in the Lender Short Sales Pipeline.

Now you don’t find out about these Fees until your get the Short Sale Approval for the Lender. I have seen this type on situation Kill the Deal on many occasion. Most on my friends that are Realtors experience the same Problems.

Houses For Sale that are Short Sales can be very stressful for Home Buyers that are in the Market as a First Time or a Second Time Home Buyers that are buying during this Mortgage Purchasing Cycle in 2012, 2013 and 2014

Homes For Sale Jacksonville, Fl – Short Sale Homes in Jacksonville, FL