What a Summer!!!

Most of you know that we are still recovering of getting use to a “New Normal” in dealing with Covid-19. So, I wanted to give you an update on upcoming events and opportunities. Here are the current promotions that are going on…

“First Responders” (Active Military, Veterans, Police, Fire, Health Care Professionals, Teachers) I’m giving you a 10% discount off the following services:

“Home Inspections Services”

and

“Residential Design Preliminary Services”

Just produce documentation supporting your claim as a “First Responders” and you will receive your 10% discount.

This offer will end on December 31, 2020.

“NACA members”, I wanted to say congratulations for you going through the NACA Home Buyers Program on home ownership. So as a thank you for you going through the program. Just produce your NACA ID # and you will receive your 10% discount.

This offer will end September 30, 2020.

“New Decade – New Home Seminar Series”, that was schedule for September 12, 2020 has been reschedule to October 31, 2020. The formal format was to do a live presentation but due to the current Covid-19 health issue, it will be an “Online” presentation.

More detail information is coming to you soon.

As a reminder, People, Places & Things LLC and PPT Inspections are still operating safe practices until further notices. These safe practices including the following…

    Clients should limit the number of people attending inspections to as few, as necessary.

    All parties should meet the inspector in front of the property- NOT inside the property.

    Inspectors will provide disposable (non-vinyl) gloves for each participant. Masks will not be provided but may be brought and worn if desired.

    All gloves used during inspection will be collected and disposed of immediately upon exiting the home.

    Sanitary wipes and/or hand sanitizer will always be accessible during the property inspection.

It is important to recognize that as home inspectors and rehab consultants, we are entering homes and touching surfaces that may be contaminated by this virus. During the entire process, we need to stay focused on the home buying activity and the process of the inspection.

That is all for now.

203kconsultants #NAFHAC #203kdiscoverydays #203kproject #203klender #203krehab #203kloan #203kcontractor #renovationproject #renovationloans #homerenovationloan #203kconsultant #203kcontratista #203krehabloan #203kloans #fhaloan #fha203k #generalcontractors #homeinspectors #homeinspections #buildingdesign #residentialdesign #homedesign

THE PAUSE IS OVER – Here is the “New Normal” (For Now)…

The “Staying in Place” order has been lifted so in the State of Michigan we can resume somewhat the new normal for now. So as a reminder, People, Places & Things LLC and PPT Inspections are still operating safe practices until further notices. These safe practices including the following…

  • Clients should limit the number of people attending inspections to as few, as necessary.
  • All parties should meet the inspector in front of the property- NOT inside the property.
  • Inspectors will provide disposable (non-vinyl) gloves for each participant. Masks will not be provided but may be brought and worn if desired.
  • All gloves used during inspection will be collected and disposed of immediately upon exiting the home.
  • Sanitary wipes and/or hand sanitizer will always be accessible during the property inspection.

It is important to recognize that as home inspectors and rehab consultants, we are entering homes and touching surfaces that may be contaminated by this virus. During the entire process, we need to stay focused on the home buying activity and the process of the inspection.

Here are some wonderful opportunities for the clients to participate during the month of June.

New Decade – New Home Seminar Series that was schedule for April 18, 2020 has been postpone until September 12, 2020. The current format was to do a live presentation but due to the current Covid-19 health issue, the decision to have a live in person event will be made soon.

“First Responders” (Active Military, Veterans, Police, Fire, Health Care Professionals) I’m giving you a 10% discount off the following services:

“Home Inspections Services”

and

“Residential Design Preliminary Services”

Just produce documentation supporting your claim as a “First Responders” and you will receive your 10% discount.

This resolution will end on December 31, 2020.

NACA members, I wanted to say congratulations for you going through the NACA Home Buyer Program on home ownership. So as a thank you for you going throughthe program, I am giving you a 10% discount off “Home Inspections Services” during the month of June.

Just produce your NACA ID # and you will receive your 10% discount.

More information and offers are coming soon.

Thank you for your business.

#203kconsultants #NAFHAC #203kdiscoverydays #203kproject #203klender #203krehab #203kloan #203kcontractor #renovationproject #renovationloans #homerenovationloan #203kconsultant #203kcontratista #203krehabloan #203kloans #fhaloan #fha203k #generalcontractors #homeinspectors #homeinspections #buildingdesign #residentialdesign #homedesign

A PAUSE… DAWN COMING SOON

Light at the end

Okay, being “Staying in Place” at home is beginning to get to us. However, hope is on the horizon as in Michigan, May 1 is fast approaching and the state government will have to make some important decisions. It does not mean that we will be getting our lives back before Covid-19 but it means that we will began to do a slow burn back to becoming a normal society. As the weather gets warmer and some of our industries are getting to go back to work (housing market, I hope), golf course (please) and attending church service in person (cannot wait) we will live by the specter of seeing if the health experts gets the prediction correct on Covid-19 second wave is coming or if we as a society can withstand a possible “Staying in Place” order during the summer or fall months.

Since I am an opportunist at heart, I am hoping for the best but preparing for the worst. So, until the time we are getting the all clear from the proper authorities, PPT Inspection process under Covid-19 will continue.

Why?

Because even when other industries will be permitted to go back to work (housing market), there will be a transition period and during that time the protection of the client and their representatives, seller and their representatives and to myself will be paramount. As a reminder…

  • Clients should limit the number of people attending inspections to as few, as necessary.
  • All parties should meet the inspector in front of the property- NOT inside the property.
  • Inspectors will provide disposable (non-vinyl) gloves for each participant. Masks will not be provided but may be brought and worn if desired.
  • All gloves used during inspection will be collected and disposed of immediately upon exiting the home.
  • Sanitary wipes and/or hand sanitizer will always be accessible during the property inspection.

It is important to recognize that as home inspectors and/or rehab consultants, we are entering homes and touching surfaces that may be contaminated by this virus. During the entire process, we need to stay focused on the home buying activity and the process of the inspection.

Hope that helps and its almost over. Yay.

A PAUSE…

Prevention-Graphic

The Covid 19 Pandemic is real…

Whether you personally ascribe to the validity or severity of the crisis, others are. For that reason, I believe it is time to start taking actions to provide calm and confidence to our employees, clients, referral partners and the community in general.

These are the actions that PPT Inspections are implementing in order to assist with your protection during property inspections. That these measures include the following:

  • Clients should limit the number of people attending inspections to as few as necessary.
  • All parties should meet the inspector in front of the property- NOT inside the property.
  • Inspectors will provide disposable (non-vinyl) gloves for each participant. Masks will not be provided but may be brought and worn if desired.
  • All gloves used during inspection will be collected and disposed of immediately upon exiting the home.
  • Sanitary wipes and/or hand sanitizer will always be accessible during the property inspection.

It is important to recognize that as home inspectors, residential designers or rehab consultants, we are entering homes and touching surfaces that may be contaminated by this virus. During the entire process, it should be stressed that conversation should NOT include discussion of the current health situation/crisis (everyone knows it by now) but stay focused on the home buying activity and the process of the inspection.

By using reasonable, common sense practices, we are showing our customers that it is “business as usual”- with a few adjustments. Your referral partners and clients will appreciate your pro-active efforts on their behalf and will see you as the calm, caring professional who knows the importance of their home buying process but also recognizes the need for extra precautions during this time.

I hope these suggestions will be useful to you over the next weeks and months – as the situation resolves.

If you have any tips or suggestions, please comment and remember, we are all in this together.

Sincerely,

Walter L. Williams – President

People, Places & Things LLC – Residential Design, Architectural Drafting and Space Planning

PPT Inspections – Home Inspection, Building / Site Inspection and HUD 203k Consultant

 

 

New Decade – New Home Seminar Series

Home Seminar Design Final #1

What better way to start off a new decade than with buying your very first home? Of course, the process can be quite confusing. PPT Inspections is here to help by hosting a homebuying and home inspection seminar in Detroit, MI.

When you join our first-time homebuyer seminar, you’ll get valuable information about:

  • The homebuying process from start to finish
  • The power of using a rehab loan to get the house of your dreams
  • Finding the neighborhood and home that is right for you
  • What to expect during the process, from showings to closing

We’ll be hosting our first-time homebuyers seminar on Saturday, April 18th from 9:30 a.m.-3:00 p.m. Continental breakfast and lunch will be provided. The seminar will be held at:

PW Community Development Nonprofit Housing Corporation
20011 Grand River Avenue
Detroit, MI 48219

In addition to learning valuable information about the homebuying and home inspection process, all attendees will receive a gift bag and will be entered to win prizes

RSVP today by  reserving your seat via Evite at…

https://www.evite.com/event/0310HOJCF7RKWEZRMEPKJYCD3RPNDQ/activity

Use the QR Code…

QR

Or call to get more information…

877-399-203K

Happy Valentine’s Weekend!!!

Hearts

I hope everybody had a nice “Valentine’s Day”. So, let me give you an update…

Back in the new year, you were eligible to get an 10% discount off the following services…

“Home Inspections Services”

and

“Residential Design Preliminary Services”

We’ll because I’m still in a loving mood, I’m extending the sale until the end of the month. Just mention the discount before services rendered.

Enjoy your Valentine’s Weekend.

What can I do for you in 2020?

2020

Happy New Year!!!

A new year and a new decade is upon us and as I had time to reflect, I have a lot to be thankful for. Since everybody gives a “New Year’s Resolution(s)” I was thinking on what kind of resolutions can I give myself. After thinking about it, I concluded that the best “New Year’s Resolutions” that I can give to myself is to give to others.

So, here are my best “New Year’s Resolutions” that I can give to you…

Resolutions #1 – To all the “First Responders” (Active Military, Veterans, Police, Fire) I’m giving you a 10% discount off the following services:

“Home Inspections Services”

and

“Residential Design Preliminary Services”

Just produce documentation supporting your claim as a “First Responders” and you will receive your 10% discount.

Thank you for your service protecting us.

This resolution will end on December 31, 2020.

Resolutions #2 – Now until “Valentine’s Day, 2020”, I’m giving the same 10% discount off the same services just like the “First Responders” to everyone else…

However, this resolution will end on Valentine’s Day, February 14, 2020 for everyone who is not a “First Responder”.

That’s all for now. Enjoy ringing in the New Year and let’s get ready to go to work.

 

Why a “Renovation Loan” Works For You – Part 5 – The most important player in the rehab home renovation process.

Part 5 – Rationale:

You get a phone call from a potential buyer or from a lender asking the question – Can you do a 203K Work Write Up? Normally the answer should be “Yes”. However, after getting the information on the details of the project, I ask this question, “Has the buyer selected a general contractor?”

Well…

This may sound absurd but the most important person on this process is not the lender (whom controls the loan and distributes the funds) nor the borrower (whom found the home and will be paying the mortgage) but you guess it, it’s the general contractor.

The role of a General Contractor

contractor 1

Most rehab lenders have a standard procedure to assess a contractor’s eligibility. A general contractor is required to submit cost estimates along with the license documentation, a copy of the commercial liability insurance policy needs to be submitted for approval. It does not hurt to have references, credentials and financial data at the ready, if asked from the lender.

Then an agreement is reached with the contractor to complete the work at the agreed price within the stipulated timeframe. An IRS w-9 form must also be collected for the general contractor and for any other vendors involved in the completion of the renovation work. This step is necessary prior to release of any fund advance to the contractor for initiation of the repair work.

A general contractor is expected to complete the proposed work in accordance with the details outlined in the written estimate, homeowner/contractor agreement and approved change orders. All the repair work and improvements should be completed under the applicable local codes and ordinances. Several permits are necessary and must be secured prior to beginning any concerned work. All payments required for permits will generally be listed in the 203k contractor’s bid sheet.

Contractors need to understand the following

The borrower is responsible for approving, selecting and hiring whichever contractor they want, however for a large construction project, I recommend at least three contractor’s bids, including the borrower’s contractor. Why? Because as the borrower, you will have to live with the results after the contractors collected their payments and the borrower will have to pay on the mortgage. During the construction process, there will be issues that we all have to agree on. In addition, each contractor bid will not come out the same price, but the scope of work will have to be the same as the Preliminary Work Write Up (Feasibility Study). The lowest bid does not mean the borrower will select that contractor. That contractor may have to explain how they got those numbers. My job as a consultant is to review each of proposed cost in thorough detail. It is my responsibility to ensure that the repair costs are acceptable and within reasonable estimates. Anything that is deemed to be excess or unnecessary is resolved on consultation with the borrower, contractor and the lender.

The compensation structure setup by these types of loans does not always permit contractors to receive pre-renovation deposits/start-up funds. This is very important, general contractors must be financially capable of affording the start-up costs and ongoing expenses with any rehab renovation project. Ample credit lines with suppliers and subs and/or sufficient capital/reserves will be verified as part of the certification process.

So, how do the general contractors get paid?

contractor 2

The contractors are paid in a series of draws by the borrower’s lender through escrowed funds. At closing, the lender places the rehab/improvement funds into an escrow account. The general contractors need to be as knowledgeable as possible regarding the rehab process. The exception that a general contractor will receive funds at startups is the FHA 203k Limited. The general contractor receives a maximum of two (2) payments. After closing on the home, contractors may receive a portion of the job cost (maximum 50%) as a pre-construction payment, subject to lender approval but may take weeks to arrive. Therefore, contractors must be financially capable of affording all the start-up costs and a portion of the ongoing expenses with the 203k project (ample credit lines with suppliers and subs and/or sufficient capital/reserves). Once all the work is complete, the contractors can request final payment of the remaining portion of the job cost according to the proposal that was submitted and approved by the borrower and the lender.

 

 

 

 

Why a “Renovation Loan” Works For You – Part 4 – Pros and Cons

index2

Part 4 – Rationale:

If you’re looking to buy a home at a price you can afford in a desirable neighborhood, you may have to consider homes that aren’t in perfect shape, or even ones that require a complete overhaul. The good news is that some mortgage companies may allow you to wrap the costs of a remodeling project into the loan. This could be true when you use this type of mortgage to purchase a property, or when you decide to remodel a home you already own and refinance to access funds for your project. However, there are Pros and Cons going into each types of renovation loans. Here are a few of them…

Pros and cons of an FHA 203(k) loan

FHA 203(k) rehab loans come with both advantages and disadvantages. Some reasons to consider these loans are listed below, along with some of the pitfalls that make them a less attractive option.

Pros of FHA 203(k) loans

  • FHA loans have low credit-score requirements: You can qualify for an FHA 203(k) loan with a credit score as low as 500. It’s a much lower minimum standard credit score than many other types of home loans.
  • Wrap your remodeling costs into your home loan: The biggest benefit of FHA 203(k) rehab loans is that you don’t have to pay for remodeling costs out of pocket. You can wrap the costs of your project into your primary home loan instead.
  • Interest rates are typically lower than some other mortgage options: FHA loans also come with low closing costs, and FHA interest rates may be lower than some other types of home loans.

Cons of FHA 203(k) loans

  • Standard 203(k) loans require you to work with a loan consultant. Not only can working with a 203(k) loan consultant cost up to $1,000 in fees for the service, but this layer of work adds yet another step to the process. Remember that your 203(k) loan consultant will have to complete an inspection of the home, sign off on all improvements and their costs and address any health and safety issues.
  • Government-backed loans tend to come with a lot of rules. Government-backed FHA loans have many rules, and FHA 203(k) loans are no exception. For example, you cannot use this type of loan for “luxury items” including hot tubs, outdoor fireplaces or swimming pools.

Pros and cons of  an HomeStyle Renovation Mortgage Pros

HomeStyle Renovation Mortgage Pros

The HomeStyle Renovation Program enables you to finance the purchase of a home or refinance plus the cost of major home renovations with one mortgage as opposed to arranging a mortgage plus a second construction or home equity loan to finance the renovations. The HomeStyle Renovation Program offers borrowers a simple and more cost-effective solution to finance the purchase or refinance of a property plus major renovations, repairs or remodeling.

Low Down Payment or Equity Position Required

For the purchase of a single unit property with a fixed rate mortgage, the HomeStyle Renovation Program only requires that borrowers make a down payment of 5% of the property purchase price or the case of a refinance, borrowers are only required to have 5.0% equity in the property, which implies a loan-to-value (LTV) ratio of 95.0%.  The required down payment or equity position of 5% is lower than the 10% – 20% required by other standard mortgage or construction loan programs, although it is higher than the 3.5% down payment required by the FHA 203(k) Home Improvement Loan Program.

Applies to Investment Properties

The HomeStyle Renovation Program applies to both owner-occupied and non-owner occupied properties, unlike the FHA 203(k) Program which only applies to owner-occupied properties.  Borrowers can use the HomeStyle Program to purchase rental or investment properties that require significant repairs or rehabilitation.  Please note that only single unit investment properties are eligible for the program and borrowers are required to make a much higher down payment on investment properties.  Borrowers, however, can use the HomeStyle Program to purchase multi-family properties with up to four units as long as they occupy one of the units.

Financing Based on Post-Renovation Property Value

The HomeStyle Renovation Program, allows you to qualify for a mortgage based on the post-renovation property value.  For the purpose of qualifying for the HomeStyle Program, the property value is defined as the property purchase price plus the estimated cost of the renovations or the appraised as-completed property value, which is less.  Using the higher post-renovation property value enables borrowers to qualify for a larger mortgage and also eliminates the need to arrange a separate construction or home equity loan.

No Restrictions on Mortgage Type or Loan Program

While the HomeStyle Renovation Program is typically used to buy homes that require significant renovations borrowers can also use the program to refinance their existing mortgage and finance a major home improvement project at the same time.  Borrowers with high mortgage balances and limited equity in their homes may find it challenging to qualify for a construction loan, HELOC or home equity loan to finance a home improvement project.  Borrowers, however, can use a HomeStyle Renovation Mortgage to both refinance their existing mortgage and finance their home renovation.  Additionally, borrowers can use either a fixed rate mortgage or an adjustable rate mortgage (ARM) with the HomeStyle Renovation Program.  Although the down payment or equity position required for an ARM is higher than for a fixed rate mortgage, the ability to use multiple loan programs increases your financing flexibility.

No FHA Mortgage Insurance Premium

Unlike the FHA 203(k) Program, the HomeStyle Renovation Program does not require borrowers to pay an upfront mortgage insurance fee.  Additionally, borrowers that make a down payment of at least 20% are not required to pay ongoing monthly private mortgage insurance (PMI).  Borrowers that make a down payment of less than 20%, however, are required to pay PMI, which is an extra monthly cost on top of your mortgage payment.  Depending on your credit score, LTV ratio and mortgage program, monthly PMI may be less than monthly FHA mortgage insurance premium (MIP).  Additionally, PMI is removed when your LTV ratio falls below 78% whereas borrowers are required to pay FHA MIP over the entirety of their mortgage.

HomeStyle Renovation Mortgage Cons

Higher Interest Rate

The interest rate for a HomeStyle Renovation loan is usually .125% – .375% higher than the interest rate on an FHA 203(k) loan or other conventional mortgage program.  Additionally, borrowers with lower credit scores and higher debt-to-income ratios usually pay higher interest rates with the program.  The HomeStyle Loan Program is offered by traditional lenders such as banks, mortgage brokers, mortgage banks and credit unions so borrowers should compare proposals from multiple lenders to find the mortgage with the lowest rate and fees.

Higher Closing Costs and Longer Closing Timeline

The HomeStyle Program requires borrowers to submit to the lender plans and specifications for the home renovation project.  Preparing these plans can be costly and time-consuming.  Additionally, due to the additional work required to review and process a HomeStyle mortgage, most lenders charge an extra fee which increases your closing costs.  Some appraisers may also charge higher fees because they are required to appraise the property both before and after the home renovation project is completed.  Additionally, because of the complexity involved, it can take more than three months to process and close a HomeStyle loan as compare to one-to-two months for a regular mortgage.  Borrowers should understand the extra cost and time associated with a HomeStyle Mortgage before selecting a lender.

Mortgage and Renovation Budget Limits

The HomeStyle Renovation program limits the size of loan you can obtain through the program.   The HomeStyle Program uses the conforming loan limit, which ranges from $484,350 to $726,525 in the contiguous United States for a single unit property.  Additionally, please note that the value of the renovations can total up to 50% of the as-completed appraised value of the property.

No Sweat Equity

Unlike the FHA 203(k) Loan Program, the HomeStyle Renovation Program does not permit home owners to be reimbursed for the labor or sweat equity they contribute to a renovation project from the loan proceeds.  Home owners can be reimbursed for any supplies or materials they purchase for the project but they cannot receive any cash proceeds from the loan.

In my next blog, I will go into details on the most important player in the home renovation process.