“Whole House Renovations”: Time-Lapsed Video Demonstrates Value Of “Modular/Panelized Construction” For Major Home Remodels (Video)

31 01 2011

The client’s desire to live in a specific Potomac, Maryland neighborhood presented a challenge that was threefold:  inventory, needs and finances.  First, there were no available lots on the market.  Second, the existing homes for sale were dated and not conducive to the family’s modern lifestyle.  Finally, the client had strict budgetary requirements for the project, but wanted all the amenities of a new home.

Having carefully evaluated the client’s needs and goals, the design build team at BOWA proposed working with an existing home in the desired neighborhood and, rather than tearing it down completely, reusing the foundation and expanding it as needed.  This saved significant dollars on demolition, foundation, materials and labor.  The homeowners also received a significant tax credit because they allowed Second Chance, a charitable organization, to do the remaining demolition.  On the contractor’s recommendation, the client also chose to maximize their value by taking advantage of pricing and scheduling benefits associated with modular/panelized construction. 

The savings realized in the initial phases of the project allowed the addition of many structural upgrades and finishing details important to both BOWA and the homeowner.  Beginning with waterproofing, unseen but critically important, through the installation of the flagstone front porch, mahogany entry door, custom hardwood flooring, woodwork and tile, the home was delivered on time, and on budget.   The result incorporated the best of all worlds:   a high-quality home that is customized to the family’s wishes.  The homeowners couldn’t be happier.

For more:  http://www.bowa.com/design-build-home-transformation-in-potomac-md/


“First-Time Homebuyers” Should Complete A “Pre-Approval Checklist” Before Looking For Homes

30 01 2011



  • The higher your credit score, the lower your down payment and monthly payments.
  • Below 660 or 680, you’re either going to have to pay sizable fees or a higher down payment
  • A score of 700 to 720 will get you a good deal and 750 and above will garner the best rates on the market
  • Have your credit report pulled and make sure there is no old, paid or settled debts pulling score down.
  • Stop applying for new credit 6 months to 1-year before you apply for financing.
  • And keep the moratorium in place until after you close on your home
  • Look for homes that are financially AFFORDABLE
  • For FHA financing your home payment shouldn’t exceed 31 percent of gross monthly income
  • If you have increasing annual income that ratio can go higher
  • For conventional financing home expenses should not exceed 28 percent of gross monthly income
  • Increasing annual income will allow ratio to go higher
  • Again, the housing payment (monthly mortgage payment, hazard insurance, property taxes and mortgage insurance) should be comfortably affordable
  • The down payment will be as little as 3.5 percent to 20 percent, depending on your credit scores and expenses
  • Closing costs can run from $2,300 to $4,000, depending on loan program
  • Down payment assistance programs are available depending on where you intend to live
  • The seller can also pay a portion of the closing costs
  • You should have three to five months’ worth of mortgage payments set aside as reserves AFTER CLOSING
  • If you have higher savings, the lender will also allow your housing payment ratio to be higher
  • Also, consider that you will have to pay 2.5% to 3% of your home’s value annually on upkeep, repairs and maintenance
  • On a $250,000 home, the monthly upkeep can be $520 to $625 per month.

FHA Confirms One-Year Extension Of The “Temporary Waiver Of The Agency’s ‘Anti-Flipping Rule'”

29 01 2011


 “…In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Federal Housing Administration (FHA) Commissioner David H. Stevens today extended FHA’s temporary waiver of the agency’s ‘anti-flipping rule.’  The extension announced today is intended to accelerate the resale of foreclosed upon homes in neighborhoods struggling to overcome possible property abandonment and blight.

  1. All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.  
  2. In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
  3. The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
  •  With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. 
  • Early last year, FHA temporarily waived this regulation through January 31, 2011. 
  • FHA today posted a notice extending this waiver through the remainder of 2011.  This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales.
  • It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Stevens.  “Today I can report that this policy change has been effective.  Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”

FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days.  Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time. 

Stevens added, “Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated.  It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

 The extension announced today is effective through December 31, 2011, unless otherwise extended or withdrawn by FHA.  All other terms of the waiver will remain the same, and HUD continues to invite public comment on it. The waiver contains strict conditions and guidelines to assure that predatory practices are not allowed.

Renovation Lending Institute’s Skip Schenker Reports On A Meeting With REO Asset Managers At “National Association of Hispanic Real Estate Professionals” (NAHREP) In Irvine, CA (Video)

28 01 2011


Mortgage Rates End Week Nearly Unchanged On Mixed Economic Data And Strong Treasury Auction Demand

28 01 2011

  • Fed meeting had no major surprises
  • Economic data was mixed compared to expectations.
  • Treasury auctions had very strong demand
  • Higher food and energy prices were a negative 
  • Domestic Product (GDP) in the fourth quarter 2010 increased 3.2%, up from 2.6% in the third quarter.
  • Economy grew 2.9% during 2010, the highest level since 2005.
  • Government spending declined during the fourth quarter
  • Consumer spending picked up significantly.
  • Consumer spending and business investment are expected to remain healthy in 2011
  • Consensus forecast for 2011 is for GDP growth of 3.2%.
  • This level of growth would be consistent with a gradual decline in the unemployment rate.

Large Numbers Of Distressed Properties Will Create Increased Demand For “Larger Home Renovations And System Upgrades” And Renovation Financing

28 01 2011

“…In the next five years, the focus of remodeling spending will shift from upper-end discretionary projects to replacements and systems upgrades…”

“The overall aging of homes and home owners eyeing the potential income gains is expected to provide a boost to the remodeling market, but the major drive leading the rebound in the remodeling industry is expected to come from distressed properties…”

Instead of reducing the price on a property, more lender servicers who manage aging REO portfolios are considering remodeling and raising the price, says Dale McPherson who has more than 30 years in the mortgage industry. The servicers are growing tired of watching investors repair and remodel these properties and sell them at a much higher price – now banks want to cash in, too. 

Remodeling distressed properties has the potential to cut the cost on losses of the lender servicers as well as help home owners benefit from remodeling margins too. 

For more:  http://www.ibtimes.com/articles/105972/20110127/distressed-properties-spur-remodeling-rebound.htm

Surveys Show That Both Homeowners And Renters Believe “Owning A Home Is A Smart Decision Over The Long Term”

27 01 2011

Among the findings of NAR’s “American Attitudes About Homeownership” survey:

  • The vast majority of both home owners and renters say that owning a home is a smart decision over the long term. Even in today’s challenging economy, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home.
  • Home owners are much more likely to be satisfied with the quality of their family and community life than renters. While more than half of owners (56%) are “very” or “extremely” satisfied with the overall quality of their family life, only about one-third (36%) of renters report the same levels of satisfaction. Also, 43% of home owners are “very” or “extremely” satisfied with their community life, compared with 30% of renters.
  • An overwhelming majority of home owners are happy with their decision to own a home. A full 93% of owners surveyed would buy again.
  • Most renters aspire to home ownership. The majority of renters (63%) say they are at least somewhat likely to purchase a home at some point in the future. Among them, young adults (18- to 24-years-old) have the strongest aspirations for home ownership.

For more:  http://www.realtor.org/statsanddata/homeownership/attitudes_homeown