One of the key factors serious buyers eye when appraising
foreclosed homes for sale in The Montvale Market is condition - the shape those properties
have been left in. The Federal Housing Administration has weighed in
with a program that can materially affect how that condition - good
or bad - will finally affect the bottom line: it's known as the FHA
203 (k).
If you are among those currently
looking at Montvale foreclosed homes for sale, the
203(k) can make a big difference. Here are some points that might
influence your decision:
First in line is whether the
program is applicable. HUD tells us that for a local property to be
eligible, it must be a one- to four-family dwelling that has been completed
for at least one year. The number of units on the site must meet Montvale zoning requirements. Furthermore,
any and all newly-constructed units must be attached to the existing
dwelling. Importantly, coops are out: cooperative units are not eligible.
The greatest effect is on Montvale foreclosed homes for sale that
need a lot of work. HUD guidelines indicate that properties that have
been demolished, or will be taken down as part of the renovation, may
be eligible -- as long as at least some of the existing foundation remains.
As you might expect, none of
this helpful news comes without some practical caveats. Although you
may get this kind of FHA rehab help for a foreclosure, this is a labor-intensive
type of loan requiring multiple appraisals (including “as-is” and
“Value After Rehabilitation”), licensed contractor projections,
and more. Since time factors are always important when dealing with
a foreclosure, it's important to choose your backup team carefully.
You will need to select the right lender and consider enlisting a team
consisting of a mortgage broker and real estate professional - both
of whom have experience getting approval for FHA 203(k) loans. You want
pros who understand the extra steps involved, not those who simply tell
you what you want to hear.
Most likely, you will want to
get actual pre-approval for the FHA loan (not just a prequalification
letter). There is a lot of additional paperwork involved, and you will
want to avoid a last-minute scramble once your desired property is on
the line.
Buying Montvale homes for sale taking advantage
of the FHA 203(k) requires organization and preparation, but can be
a great way to make a questionable rehab project on a Montvale foreclosed home for sale affordable. If you have questions about buying
the right property and the outlook for getting a 203(k) insured mortgage
loan, get in touch with an FHA-approved lender in Montvale or call me anytime for an introduction. Then
-- let's get started!