1. LEARN HOW TO SELL USING 203(k) LOANS With Tim Pascarella

2. www.teampascarella.com 203k is an opportunity to sell FHA 203K can help you: – Solidify your relationship with your referral sources – Help expand your referral sources business and YOUR business – Expand your market reach and search – Gain a “one up” on the competition

3. www.teampascarella.com Ross Mortgage is one of the top 203K lenders: #1 In Michigan #10 in the U.S. in the U.S.

4. www.teampascarella.com Who should you be selling the 203k product to? Realtors Current customers Financial Planners

5. www.teampascarella.com Marketing: iPad Presentation Email database Mail Outs Social Media Past Realtors Experience Post Before and After pictures

6. www.teampascarella.com Debunk Common Myths of the 203K 1.They are expensive 2.The rates are high 3.Takes longer to close 4.Contractors don’t get paid 5.Have to use an consultant

7. www.teampascarella.com Why 203k Through the Federal Housing Administration (FHA) 203K mortgage insurance program, your customers can purchase or refinance their home and include the costs to rehabilitate and repair it all within the same loan. This program can help you expand homeownership opportunities while at the same time revitalizing the communities you serve.

8. www.teampascarella.com 203k is a great solution Provide Customers an affordable, stable financing solution that combines the purchase of the home along with the costs of the improvements into a single loan This loan is the alternative to “cash only” MLS Listings.

9. www.teampascarella.com Steps needed for a 203k loan 1.Find a home and conduct a preliminary walk through of what needs to be done along with what you want done. 2.Acquire a proposal (bid) showing the scope of work to be done, including the cost estimate on each repair or improvement. 3.No repair minimum. 4.Total purchase price plus proposed repairs must remain in line with values of similar homes in the area, however we will base it on the “subject to” value.

10. www.teampascarella.com The Appraisal Property is appraised as Improved, “Subject To” Improved Value must equal purchase price plus estimate of repairs and is determined by comparable sales of similar properties like any other appraisal would be. Example of “As Is, Subject to” – Actual Purchase Price – Cost To Rehabilitate – Must Appraise at Improved Value – Loan amount is based on improved value Loan would be 96.5% of 130K $100,000 $30,000 $130,000 $125,450

11. www.teampascarella.com At closing: – Funds are put into an escrow account to pay for the repairs and improvements on the property. – 50% percent of escrow is disbursed immediately!! – Improvements begin immediately. 6 months to complete Steps needed for a 203k loan

12. www.teampascarella.com Steps to a Successful 203k Signed PA Collect all the Bids/Docs ApplicationUnderwritingClosing Final Disbursement

13. www.teampascarella.com Borrower Qualifications There are NO Borrower Income Limits Loan can be up to FHA Limit (county maximum) Borrower Qualifies per normal FHA Guidelines Borrower’s Minimum Investment is 3.5% of purchase plus repairs

14. www.teampascarella.com Eligible Borrowers Owner Occupied Only – Purchase – Refinance :Second Home and Investors

15. www.teampascarella.com Eligible properties Homes must be one year or older Single Family Dwellings Condominiums and PUD’s 1-4 Unit Residences – Units can be increased or decreased while conforming to local zoning laws Seller can be any legal entity – Very Important to the REO Market

16. www.teampascarella.com Repair / Replace Upgrade HVAC Systems Plumbing and electrical systems Flooring – hardwood or carpeting Window and door replacements and exterior wall re-siding A 203k loan allows you

17. www.teampascarella.com Repair / Replace Roof, gutters and downspouts Add exterior decks, patios, porches Septic System and/or well A 203k loan allows you

18. www.teampascarella.com A 203k loan allows you Remodeling Kitchens Bathrooms

19. www.teampascarella.com Painting, interior and exterior Weatherization, including storm window and doors, insulation, weather stripping, etc. Lead based paint stabilization or abatement of lead based paint hazards A 203k loan allows you Painting/Weatherization

20. www.teampascarella.com Purchase and installation of appliances Accessibility improvements for persons with disabilities Basement finishing and remodeling (no structural repairs) Basement waterproofing Appliances/Accessibility A 203k loan allows you

21. www.teampascarella.com Basement finishing and remodeling Basement waterproofing Basements A 203k loan allows you

22. www.teampascarella.com Non construction costs Non Construction Costs can also be included in the 203K loan such as: – Contingency Reserve 10-20% – Up to 6 months PITI mortgage payments – Permit Costs – Inspection and Title Update fees – Architectural & Engineering fees

23. www.teampascarella.com The essential team Real Estate Agent – Finds home and provides customer with accurate BPO. General Contractor – Must Correctly Estimate costs and complete work on time (Max 6 months allotted ) FHA 203K Specialist – YOU!

24. www.teampascarella.com Helpful tips Avoid turning on utilities FHA allows for a new case number when an appraisal comes in low and you switch to a 203K Maximize the Buyers selection Sell location Sell lay out Form good relationship with your contractors

25. www.teampascarella.com Transform a undesirable property into a home your clients will love

26. www.teampascarella.com The Opportunity is there, it is up to you to sell! For questions and concerns call: Tim Pascarella -248-259-4614