1. 203K & 203K-Streamline

2. Ideal for borrowers who:
Are interested in buying a property that needs repairs or would benefit from remodeling
Are existing homeowners that need funds to rehabilitate/remodel their property
Want to save time and money by financing the purchase or refinance with the cost of repairs
May not qualify for a conventional loan
Have low to moderate income

3. Who are first-time homebuyers
Have credit blemishes
Have limited cash for down payment or closing costs
Want to finance deferred maintenance or future wanted/needed changes to home

4. Streamline - Up to $35,000 in rehab costs
Includes the 203k fees and contingency reserve
Full - Capped only by prevailing FHA maximum mortgage amounts

5. Streamline: Full: $35,000 or less including the fees and contingency
Large & Small Dollar Projects
Frame of Home
Foundation of Home
Requires HUD Consultant
Upfront Fee for Consultant
Streamline:
$35,000 or less including the fees and contingency
Nothing with Frame
Nothing with Foundation
No HUD Consultant
No Upfront Cost

6. Full: Streamline: FHA loan limits Room Additions Attached Garages
All Streamline Repairs
Streamline:
Max. of $35,000 with fees and contingency
Electrical & Plumbing
Furnace & A/C
Finish Basement
Update Kitchen/Baths
Paint, Carpet, Floors
Roof, Siding, Window

7. No Trees, Shrubs, Flowers Home Theatre Systems
Luxury improvements that do not become a permanent part of the real property:
Examples:
No Swimming Pools
No Hot Tubs
No Saunas
No Trees, Shrubs, Flowers
Home Theatre Systems

8. Borrower obtains credit approval from iLoan
Borrower chooses property—if purchase
Borrower obtains bids for labor and/or materials for desired or required projects
Property appraisal is completed, reflecting “After Improved” value
For refinances the same appraiser may need to provide a second appraisal stating the “As Is” value—may not be required in all cases
Complete file, with bids, is submitted to iLoan’s investor
Loan Closes

9. Loan is purchased from iLoan’s investor by Bank of America
Funds are disbursed - schedule of reimbursements is dependent on program
Streamline - Up to 50% of bids disbursed at close to pay for materials only--balance paid when all work is completed
Full - Up to 5 draws as work completed

10. Streamline - initial investor disburses initial draw of up to 50% of bids & Bank of America will pay out the balance when the project is completed
Full - Bank of America handles all draws and withholds 10% of each draw until final draw is paid for the completed project

11. Borrower and contractors must sign homeowner/contractor agreement
Must Get the Following from Contractors:
Copy of current license
Copy of current liability insurance
Resume
W-9
Two References—residential projects

12. Bids: Must be detailed—think sworn construction statement
On contractor’s letterhead
Initialed by borrower
Break out cost of labor and material
Usually only need one bid on Streamline
Full K—HUD Consultant may require second set of bids

13. Self-help (owner improvements) is allowed on a limited basis
Contractors must be licensed and insured
Work on the home must begin within 30-days of closing
Work to be completed within 6-months of closing

14. 10-20% contingency reserve, determined by underwriter
Standard FHA upfront & monthly MI
No cash out allowed
Max. loan amount up to regional FHA limits
Fixed 30-year term only

15. Supplemental Origination Fee
$350 or 1.5% of repairs whichever is higher
Block 1 of GFE
Title Update-$50 per draw
Must always disclose min. of 1 in block 4 of GFE
Inspection Fee-$150 per draw
Must always disclose min. of 1 in block 3 of GFE
HUD Consultant Fee—Full 203k Only
Cost will range based on cost of project
Must disclose total cost in block 6 of GFE
This link will allow you to look for consultants

16. Standard FHA guidelines apply Manual UW approval
Must Get an “Approve” on Automated UW
620 Credit Score
31/43---Housing/Debt Ratios
Reserves only required on 3-4 unit properties
Max LTV for purchase is 96.5% sale price and rehab costs or 110% of appraised value whichever is lower
Max LTV for refinances is 97.75% after improved appraisal or costs whichever is lower
Can Have Co-Borrowers
No Other FHA Loans
(borrower and co-borrowers)

17. Refinance Purchase Two Appraisals “As Is” Value “After Improved” Value
May use taxes
Very rare
UW Decides
“After Improved” Value
Factors in the value of improvements
Purchase
Typically One
“After Improved” Value
Factors in the value of improvements
“As Is” Value = Sale Price
All normal FHA flipping rules apply to possible second appraisal!!!

18. Allowed: Not Allowed: 1-Year Old and Have Been Lived In
FHA Approved Condos
PUD’s—townhouses
Single Family
2-4 Units
Must occupy one unit
REO properties
Restrictions apply
Not Allowed:
No Spot approved condos
Homes that have never been lived in.
Investor Owned Property
Manufactured
Log Homes
Completely demolished homes including the foundation
Condotels

19. Don’t have to disclose cost of repairs
Get permission to have contractor/consultant enter home as early in the process as possible
BIGGEST DELAY WE SEE!
Purchase Price is the Price Paid
Don’t have to disclose cost of repairs
Can Get Up To 6% Seller Concessions (pending change by FED)
Based on the sale price only--not repairs
For: closing costs & prepaids
Please disclose that loan is a “K” FHA loan
Implies no issues with work orders for seller
Ask for 45-day window to close from accepted offer!!!!!

20. If we have the bids, we can order appraisal Appraisal
Appraisal is ordered through iLoan’s investor
Flipping rules apply to all files—UW may require two
With P.A. and Docs, we can submit to underwriting
Appraisal can come in later
Get Approval with Conditions
Clear Conditions
Close Deal

21. Sale Price $150,000.00
Repairs $ 20,000.00
10% Contingency $ 2,000.00
Final Inspection—per draw $
Title Update-per draw $ 50.00
Sup. Orig.(1.5% or $350) $
Total Cost = $172,550.00
96.5% LTV or 3.5% Down - $ 6,039.25
Base Loan without MI = $166,510.75
Upfront 2.25% + $ 3,746.49
Total Loan with Upfront MI = $170,257.24

22. First Mtg. $175,000.00 Second Mtg. $ 17,850.00 Payoffs:
Closing Costs & Prepaids $ 7,500.00
Repairs $ 16,350.00
10% Contingency $ 1,635.00
Final Inspection—per draw $
Title Update $ 50.00
Sup. Orig./Draw Fee (1.5% or $350) + $
Total Cost = $218,885.00
Upfront 2.25% + $ 4,924.91
Total Loan Needed = $223,809.91