You Don’t Have to Move Out to Move Up!
You Don’t Have to Move Out to Move Up!
By Jonathan Blackwell
When most homeowners want more space or a fancier place they call Real Estate Agent and start their search for a new home. It doesn’t have to be that way though, you don’t have to move out to move up! You can just RENOVATE.
Recently homeowners wanting new digs have found the going a bit tougher. Both Fannie Mae and FHA have instituted tough new rules aimed at homeowners looking to buy a new place and rent out their current residence until market conditions improve. For both you now must have significant equity, 25% and 30% respectively, to use the rental income on your current residence to qualify. That means that many people now have to qualify for both mortgage payments. Obviously, that simply isn’t possible for many homeowners. All is not lost for those wanting a bigger space though, they just need to look a little closer to home.
Both FHA 203K and Fannie Mae Homestyle Renovation Loans allow homeowners to refinance and renovate their current residence. They allow it all based on the after repair value of the renovations instead of what your home is currently worth. Only have 10% equity currently? That is not a problem for FHA 203K or Fannie Mae Homestyle renovation loans, they are only concerned with the equity you will have when you are finished with your renovations! So, how can you use a Renovation Loan?
New Freestanding Appliances, Complete Bathroom Remodel, Adding a New Master Bathroom, Upgrading Heating & Cooling Systems, New Siding, Fresh Paint Inside or Out, Attic Build-Outs, Finishing the Basement, Making the House Handicapped Accessible, Complete & Total Renovation, Adding a 2nd Floor, Adding a New Master Bedroom, New Deck & Outdoor Kitchen Area, Upgrading Doors and Windows, New Hardwood Flooring or New Carpet, New Lighting, Upgrading Plumbing & Electrical System, New Fixtures for Bathrooms and Kitchens, Opening Up a Floorplan, New Kitchen Counters, Vaulting Your Ceiling, Going Green with Solar Panels, and Building a New Garage to name a few!
There are hundreds of ways these loans can help you create the house you want without having to pack and unpack a moving truck. You can even add those green and energy efficient improvements you have wanted while you are creating your new space. If you are in Georgia, Alabama, Florida, Tennessee or Virginia and would like to discuss your FHA 203K or Fannie Mae Homestyle choices go visit our quick and easy Renovation Advisor now!
Jonathan Blackwell
FHA 203K Specialist
Hometown Lenders
404-551-3845
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Are You Doing a Green Renovation?
If so contact me and I will feature you on this blog! We can track your progress, costs, trials and tribulations while hopefully inspiring some other homeowners / homebuyers to renovate GREEN.
Jonathan Blackwell
404-551-3845
What is HERS Report & Why Do I Need One?
Most energy-efficient financing programs will encourage you to have an energy rating for your new or existing home, which will tell you and the lender how energy efficient it is. A rating typically involves an inspection by a professional energy rater who is certified under a nationally or state accredited home energy rating system (HERS). There are several options regarding HERS, so the type of HERS used will depend on where you live. Some states even have more than one HERS.
For the most part, an energy rater will inspect the energy-related features of a home, such as insulation levels, window efficiency, heating and cooling systems, and air leakage. After the inspection, the energy rater will probably give you a report that includes the home’s energy rating, along with an estimation of annual energy use and costs. The report also may include recommended energy improvements, if needed, and their costs, as well as the potential annual savings and eventual payback of the improvements.
To help qualify for most energy-efficient financing, the report usually must show that the home is energy efficient or that recommended improvements are cost effective. Ultimately, any improvements will save you more money than you’d be borrowing to install them. While calculating whether a borrower qualifies for a mortgage, a lender can recognize these savings and add the cost of the improvements into the mortgage. Or, if the home is already energy efficient, the lender can stretch the debt-to-income qualifying ratio, which is expressed as a percentage (the ratio is calculated by dividing a borrower’s monthly payment obligation on long-term debts by the borrower’s net effective income or gross monthly income).
The cost of a home-energy rating and how it can be paid—by the borrower, the seller, the lender, the real estate agent—or financed as part of the mortgage, as well as the availability of certified energy raters, can vary from state to state and from one energy-efficient financing program to another.
For more information on who to contact for a HERS report in Atlanta contact us today.
Jonathan Blackwell
404-551-3845
Energy Efficient Mortgages Get Boost From New Housing Bill
While we are still combing through the new 800 page housing bill, we have noticed a few huge items designed to increase the market for energy efficient mortgages. Previously, FHA EEMs allow lenders to add 100 percent of the additional cost of cost-effective energy efficiency improvements to an already approved mortgage loan (as long as the additional costs do not exceed $4000 or 5 percent of the value of the home, up to a maximum of $8000, whichever is greater). No additional down payment is required, and the FHA loan limits won’t interfere with the process of obtaining the EEM. The new rule eliminates that $8000 cap and changes it to 5% of the purchase price / appraised value of the home. On a home that sells for $300,000 that means you can get $15,000 of energy efficient improvements with having to qualify for the additional debt to income produced by the higher loan amount or putting the extra down payment that would also be required by the higher loan amount.
The bipartisan proposal was put forward by Sens. Jeff Bingaman and Pete Domenici, chair and ranking member of the Senate Energy Committee. Here’s what they had to say about the amendment…
Sen. Bingaman: “With high energy prices expected to continue, a streamlined energy efficient mortgage process would make energy efficient new homes and energy retrofits much more attractive to builders and consumers. Promoting energy efficient homes will reduce the amount of energy we consume in our homes while also helping mitigate the effects of global warming.”
Sen. Domenici: “American homes serve as the front-line for improved energy efficiency. I’m pleased that the bill managers have accepted our amendment to identify obstacles that are making it more difficult to build, buy or renovate energy efficient homes. In this time of rising energy costs, we should do everything possible to help people use less energy — and spend less money.”
Along with that, the bill also releases more money dedicated to the funding Energy Efficient Mortgages. Expect to see more and more incentives coming in the near future as lenders AND consumers start to understand the importance of going green at home.
Green Guide — Atlanta
If you aren’t watching Discovery’s new channel Planet Green you should. The website is fantastic as well, very navigable and loaded with excellent green tips like this green guide for Atlanta.
Despite a bad rep for traffic congestion and water shortages, Atlanta is full of eco-friendly places to go and — especially — places to eat. So lighten your impact while you’re there with our list of 10 notable travel tips for anyone Atlanta-bound. (You can also check out TreeHugger’s Atlanta archives for more background info on the city.)
- Stay at a Green Hotel for the Design-Savvy
The Emory Conference Center Hotel is, as its name might suggest, both a place to stay and a place to hold your business meetings. Styled in the vein of mid-century modern architect Frank Lloyd Wright, the hotel has earned Green Seal certification, implements an extensive recycling system (everything from light bulbs to tennis shoes), and makes a concerted effort to refurbish rather than buy new. - Dine at Watershed Restaurant
Most big U.S. cities have the prerequisite celebrity-owned restaurant — but most of these are not like Watershed Restaurant. Partially owned by Indigo Girl Emily Sailers and housed in a converted gas station, Watershed boasts lunch and dinner options cooked up from local and organic ingredients. - Soak up the Wildlife at Zoo Atlanta
While you are taking in the lions and tigers and bears (oh my) at Zoo Atlanta, you can recycle the materials you use, such as your visitor’s guide. The zoo recently kicked off the “Think Green” campaign to help both zoo visitors and employees consider their environmental impact. Plus, before you toss that cell phone, ask about the zoo’s take-back program, which disposes of items that can’t be picked up curbside. - Ride MARTA, Atlanta’s Public Transportation System
Avoid the famed Atlanta congestion with MARTA, the city’s public transportation service. Groups and conventions should check out MARTA’s visitor pass, which offers unlimited rides around town via rail and bus for less than the cost of a taxi from the airport to your hotel. - Walk and Run at Piedmont Park
Every Saturday between 9 a.m. to 1 p.m., early May through early December, Piedmont Park hosts a Green Market: Here you can stock up on locally produced food — including fresh seasonal produce — and local crafts. The park, only two miles from downtown Atlanta, also serves as a great place to wind down with its miles of walking and jogging paths. - Chill at 5 Seasons Brewing, a Bar Serving Organic Beer
An organic strong English Ale? Now you’re speaking our language. Although the organic ale isn’t available year-round at 5 Seasons Brewing, the non-organic, locally made brews and sustainability-focused menu are. They even use their spent brewer’s grain in their bread or send it off to a local organic farm for compost. We’ll drink to that. - Rent a Chauffeured Hybrid from Elite Green Car
A hybrid SUV can’t trump public transit when it comes to going green, but if it’s a chauffeured ride you require, Atlanta’s Elite Green Car is the way to go. Lexus RX400 hybrids lug you (and hopefully two or more of your carpooling co-workers) around the city in a vehicle cleaner than most taxis. - Shop at an Eco Lifestyle Store
Eco Bella bills itself as “the only completely organic lifestyle store in Atlanta.” Products range from organic foods to organic threads, making it a good place to indulge in those consumerist tendencies. - Dine at a Cheap Vegan and Vegetarian Restaurant
With a name like Flying Biscuit, it’s hard to go wrong. This comfort food-specializing restaurant has fare for veggies, vegans, and omnivores. A budget-friendly menu makes it easy to grab a meal for under $10, and you can indulge in breakfast all day long. - Breakfast and Brunch at Green Restaurant Radial
Yet another breakfast favorite is Radial, which also serves the brunch and lunch crowds. A member of the Green Restaurant Association, Radial’s practices are as responsible as their fair trade coffee. Recycled and compostable paper products are used where possible, everyday light fixtures are CFLs, and the bathroom sinks are equipped with low-flow faucets.
Like this? Check out more of Planet Green’s Green City Guides.
10 Good Benefits Consumers Should Consider For Building or Remodeling Green
William Johnson, a ReMax Realtor in San Diego, wrote a great article on ActiveRain.com on just a few of the benefits of going green at home. Thanks William!
10 Good Benefits Consumers Should Consider For Building or Remodeling Green
There is a lot of emphasis these days about building green and thinking green when it comes to our environment and our homes. Here are ten things that homeowners should be aware of when it comes to building or remodeling green.
1. Better quality homes are built when incorporating many of the new green building practices by the home builders. When building a home or remodeling one, the results demonstrate a better quality home and can lead to some serious savings in the utilities, maintenance costs and lower heath risks.
For example, keeping the vents properly sealed in your home can prevent air from escaping in the heating and cooling of your home decreasing the amount of energy it takes. Buying products made of wood and not of fiberboard can help minimize the amount formaldehyde ( a know human carcinogen) from being brought into the home. Many building products use formaldehyde in the adhesives of the particle board often found in the making of kitchen and bath cabinets,in the carpet manufacturing, etc. Avoiding these products can also help reduce some of the health risks associated with manufacturing chemicals.
2. Energy efficient appliances can save enough energy over just a few years to actually offset a major portion of their original purchase price.
3. Replacing incandescent light bulbs with the newer comapct fluorescent bulbs CFL’s , can save as much as 65% of the energy costs to light you home. These bulbs are available to replace all types of lighting be it table lamps, recessed lighting, strip lighting. The reduced amount of heat from the fluorescent bulbs can also save in cooling costs.
4. By installing a recyclable water system you can recycle used water for use on landscaping and dramatically cut the amount of water used and help with conservation of one of our most precious or resources, water.
5. Learning about the longer lasting materials and incorporating them in your construction or remodel plans can save valuable resources and provides for the recapture what would be going into the land fills in the form of builders waste.
An example of this is the new recycled plastic and wood fibers used in outdoor decking. By not using new wood from cutting down more trees, but using the recycled wood and plastics that might otherwise end up in landfills, you are rewarded with a product that reduces pest infestation, is more weather resistant and requires little or no maintenance. Using these engineered products from waste makes good green sense.
Solar panels may be incorporated as part a roof design providing new ways of incorporating sources for renewable energy. In addition there are new roofing materials with a 50 year life span as opposed to many products that do not last even 25 years that could save a lot when the costs are amortized over the longer life span of the roof. There is also a cost savings in that they reflect heat and the cold extremes better, last longer and save on energy in the heating and cooling costs.
6. Building or remodeling green can save in maintenance costs. Because some of the materials are engineered from recyclables they actually can last longer. Many of the engineered products require little effort or expense in maintaining them.
7. Another part of building green is making for a weather tight construction outside on the shell of the home. But that also will also require better ventilation inside. Proper ventilation of Kitchen and baths, storage areas etc, which can trap mold spores and allergens in the home need good ventilation built in to assure their release. Creating a balanced or slightly ‘positive’ ventilation system will improve the air quality and be more a comfortable home to live in
8. Things that last longer hold there value longer. With lower maintenance built homes or remodeled ones, these homes could hold their resale value better than the more conventionally constructed home. Being more energy efficient and with savings on the operating costs may also increase their value. If not in actual dollars at least in the desirability factor.
9. Homes that are built using the green standards may also be eligible for tax savings and credits. There are lenders in the market place that encourage these standards and there are also programs that may allow a buyer when purchasing a qualified green home to qualify for a better mortgage through a program called (EEM) Energy Efficient Mortgage.
10. Homes that are built or remodeled with the green standards may also qualify for some actual outright cash savings when purchasing the energy efficient products. This may require a bit searching around but these cash savings are reportedly out there. There have also been numerous grants made to energy providers that establish programs where consumers utilizing energy conservations methods throughout the home can save on their energy bills.
11. Bonus: After building or remodeling green, check out the landscaping plan and use materials that require less water. Planting trees to shield the house from the heat of the sun during the summer months can cut utility bills measurably and in the winter months when the leaves are off, allows the sun to warm the house. More and more nurseries are not only providing the plant material that requires less water and also have information with suggestions on how and where to plant the material for maximum energy benefit.
http://activerain.com/blogsview/607406/1-Good-Benefits-Consumers
What is an Energy Efficient Mortgage?
An Energy Efficient Mortgage (EEM) is a mortgage that credits a home’s energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home.
To get an EEM a borrower typically has to have a home energy rater conduct a home energy rating (HERS) before financing is approved. This rating verifies for the lender that the home is energy-efficient.
In the past most EEM’s were used to purchase a new home that already had energy efficient improvements in place. However, we specialize in the opposite of that, we help show you how to renovate your current home and add energy efficient improvements or to purchase an existing home with a FHA 203K renovation loans and add the improvements during the renovation process. So how does it benefit me?
Besides the fact you are allowed higher debt-to-income ratios, FHA EEMs allow lenders to add 100 percent of the additional cost of cost-effective energy efficiency improvements to an already approved mortgage loan (as long as the additional costs do not exceed $4000 or 5 percent of the value of the home, up to a maximum of $8000, whichever is greater). We encourage you to take advantage of these money saving improvements while, at the same time, using environmentally friendly building materials and techniques to a truly create a home that has a minimal impact on the environment.
Getting a GREAT Deal on a HUD Foreclosure
These days HUD foreclosures are everywhere. They are everywhere because the path to ownership for a lot of these homes was quite low initially. This is good for you because HUD homes represent some of the absolute best bargains on the market these days. Purchasing a HUD home is a little different than purchasing a traditional foreclosure though. That is why is is important you get a good knowledgeable HUD Realtor to help you out. How is it different? First of all, HUD has an automated bidding system, an easily manipulated one at that. HUD’s system and what you should bid is based a formula derived from days on market and number of times the price has dropped. A good HUD Realtor can usually get you within a few thousand of the lowest bid that the system will accept in the absence of other bids. This means HUGE discounts for you if you know the right Realtor. When you are perusing HUD listings you need to be aware of some of the caveats and what they mean to you. One of the things you need to pay close attention to when purchasing a HUD home as a primary residence is the FHA insurability. Homes with less than $5000 in repair are usually classified as FHA Insurable. HUD will escrow the repair money in an account for you to fix what the appraiser has noted needs fixing after you close. HUD Houses with over $5000 needed generally are FHA 203K Insurable. This means if you want to buy with traditional FHA financing you can’t, you need a FHA 203K renovation loan (or another type of renovation loan like the Fannie Mae Homestyle). Finally, you will see some homes that are not FHA 203K insurable. These are essentially teardowns and usually need a complete head to toe overhaul.
If you really want the sweet deal on a HUD Home it is good to find one that has dropped in price once or twice and that needs a little repair. It isn’t unusual for us to see 30% discounts to as-is value on these types of properties. Keep in mind to, that if you are going the way of the renovation loan you will be using after-repair value and that you can often scuplt a house that you love with 50% equity the day you move in. Not a bad deal. This is a fantstic time to be a homebuyer.
Nehemiah Executives Expect Shutdown Soon
HUD’s second round of trying to kill seller paid down payment assistance on FHA loans may be successful per the Sacramento Bee.
“The program that has helped almost 300,000 lower-income people nationally buy homes in the past decade – while stirring controversy for years – is likely to be shut down this week, Nehemiah Corp. of America officials acknowledged Monday.
The nonprofit giant believes Congress and President Bush will ban its decade-old down-payment assistance “gift” program within days as part of a larger housing bill, Nehemiah President and Chief Executive Officer Scott Syphax said Monday.
Syphax said he met Monday with the Nehemiah board and about 30 down-payment assistance employees in Sacramento to say it’s likely the “doors are closing” on the program.”
This could have a real effect on the housing market throughout the US. My hopes are that we will move to the 1.5% down payment for FHA that the Senate has proposed if this is the case.
HUD will still allow other down payment assitance including help from relatives. For more information on down payment assistance options you can read my article from a month ago located at:
Jonathan
What is Eco-Friendly Renovation Lending
In short Eco-Friendly lending helps helps you discover new ways to reduce your energy consumption and how to finance the transition to a greener lifestyle. With energy prices forever rising and the planet starting to feel years of neglect, it has become ever more important to look for new ways of doing things. What better place to start than your biggest asset, your home? We will help you explore what renovation projects will help you reduce your energy consumption as well as show you the ins and out of renovation loans and energy efficient mortgage solutions as a way to finance the change. There are lots of blogs out there for what to do, but we are the only one dedicated to showing you how to pay for it. Let’s face it, if you have looked into making your home more eco-friendly in the past then you know that going green isn’t cheap. Whether it be solar panels, energy efficient appliances, EnergyStar windows, additional insulation or tankless water heaters, none of them are cheap. Regardless, there are dozens of mortgage programs, tax incentives and purchase credits out there designed to help you pay for your new green home.
Whether you are looking to go completely “off the grid” or just looking for a way to shave some costs off your monthly energy bills, we will provide the solutions and advice you need to make it happen. Along the way we will provide you with other tips you can use when building or renovating your home to help reduce your energy consumption, save yourself some cash and feel good about your contribution to saving the planet.
Welcome to GoGreenWithFHA.com – Your Guide to Eco-Friendly Renovation Lending!