Interviewer: Today we are talking with Tom Yoswa. He is a renovation loan specialist. How are you?
Tom Yoswa: Hi Dan. I am doing well.
Interviewer: Well we talked in a segment about what a residential loan or renovation loan specialist does, can you explain it again?
Tom Yoswa: Well, basically, I loan people money to purchase and renovate a house. You know, what I find in the market that we are in right now, there is a lot of bank foreclosures, there is a lot of HUD properties, those properties in particular, you know, a lot of them, if you show me one that doesn't need work I will show you 10 of them that probably do. So basically it enables you to take those homes, buy them and fix them all with one loan and one close.
Interviewer: And most realtors and consumers would probably know this is an FHA 203(k) loan, is that right?
Tom Yoswa: Yes.
Interviewer: Okay, yeah.
Tom Yoswa: It's basically nothing more than a regular FHA loan with the same FHA guidelines. However, there is a construction element to it and we put the money into Escrow afterwards for the repairs.
Interviewer: And traditionally what type of buyers are using this loan and what's that price point?
Tom Yoswa: Well I mean in this market right now there is a lot of first time home buyers. You know I think there are some statistics out there say you know almost 50% of all home buyers right now are first timers, which makes sense because of the market and the interest rates, etcetera. So you know, when I look at first time home buyers most of them are not buying you know $300,000 houses, they are buying $150,000 houses and you know, the large majority of those homes need some sort of work.
Tom Yoswa: Carpet, kitchens, bathrooms, new roofs, etcetera.
Interviewer: So a $100,000 will say what 220, 225 is pretty much the pool you are swimming in?
Tom Yoswa: I would say for the most part I mean there are other, you know, it can go higher, it can go lower, it just really depends on who the buyer is and what they are looking at.
Interviewer: And what type of repairs can they make under this program?
Tom Yoswa: Dan, you can do just about anything, you know carpet, paint, kitchens, bathrooms are usually the typical ones. People don't know you can put appliances into the loans, if it has a furnace or any of the HVAC stuff that isn't functioning, you can do that.
Interviewer: Hot water heating?
Tom Yoswa: All that stuff,...
Tom Yoswa: Roofs, you can do it, obviously anything exterior, landscaping in some situations, etcetera.
Interviewer: All right, a couple the obstacles that prevent people from buying a house. One is usually down payment, how much money do they have to put down with this loan?
Tom Yoswa: Well I mean, there is again, options there, too. I do conventional as well as FHA, it's the same guidelines as FHA and conventional. So with the 203(k) loan, it's, you know, as little as three and a half percent down.
Tom Yoswa: So you know whatever the purchase plus the renovation is combined, it's three and a half per cent off of that, but there are other programs, HUD has a $100 down program if it still exists, I think it does.
Tom Yoswa: And you can use that in certain situations, so it really depends but it's as little as three and a half percent down.
Interviewer: So one of the questions I know I have been asked by buyers is can you combine the programs? I want to do the $100 down HUD program, but I need the construction financing. Can you do it?
Tom Yoswa: I have done it, just so long as it's a full-price offer.
Interviewer: Oh, it's got to be full-price offer?
Tom Yoswa: It's got to be a full-price offer. So if HUD's asking 160, you bid 156, no-go. If you bid, if it's 160, you bid 160, then yes, and then again, I am not 100% sure. I believe the program is still there.
Interviewer: It sounds good. Tom, thanks I appreciate it.
Tom Yoswa: Thank you very much, Dan.
You can reach Tom Yoswa at 303-668-4499 and at MyProspectMortgage.com online.