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* 마이애미 부동산 * Mold, leaks? Renovation mortgages help fix up properties

* 마이애미 부동산 *

WASHINGTON – Sept. 24, 2012 – A long-dormant federal mortgage that covers renovation costs has suddenly become popular in Florida and across the nation, where distress sales often come with mold, leaks and missing appliances.

Five years ago, as the real-estate market was just entering its downturn, only 23 borrowers in the state took out renovation loans known as 203(k) mortgages. During the past 11 months, more than 1,000 Florida homebuyers financed using those federal-backed loans, according to the Federal Housing Administration.

“It was just being done when you had a run-down house – a leaking roof or water in the basement,” said Steven Marshall, national director of 203(k) mortgages for New Jersey-based Real Estate Mortgage Network. “It’s evolved from that because of the number of distress properties. These may be good, solid properties, but they just have not been maintained.”

The loans take into consideration that needed remodeling can add from 4 percent to 12 percent to the value of a house, added Marshall, who will be in Orlando this week to speak at the Orlando Regional Realtor Association about 203(k) loans.

Nationally, the loans have increased from 3,383 in 2007 to 21,297 last year and are on track to exceed 37,000 this year, according to the U.S. Department of Housing and Urban Development

The improvement dollars rolled into the mortgage can be used for a wide array of expenditures, including new roofs, floors, plumbing, paint, energy-efficient appliances, and remodeled kitchens or bathrooms. Even room additions can be financed, according to HUD.

Renovation loans exceed the market value of a house but differ from the kind of equity loans that buyers took out before the real-estate bubble of five years ago, when it was not unusual for home buyers to borrow more money than their home was worth. The lending industry banked on homes continuing to appreciate in value, but prices came crashing down starting in 2007.

The main way renovation loans differ from equity mortgages is that contractors must submit cost estimates for improvements before loan approval. Inspections and appraisals ensure those improvements are made in a way that adds value, said Ed Ross, who manages 203(k) loans for FBC Mortgage in Orlando. He said he used to have a handful of those loans in the processing pipeline but now has closer to 20.

The new interest, he said, is driven from all of the “scary” foreclosed properties on the market.

“It’s been pretty obvious from our side of it: When we had a big rise and fall in home values, people purchased houses, and then the bottom fell out,” Ross said. “The houses were underwater, the buyers scooted and the house sat. They languished over two or three years and became a victim of vandalism, as well as deferred maintenance. You see plants growing out of the eaves, wood rot, little leaks get big and then there’s black mold. It’s scary.”

The FHA’s 203(k) loans require a 3.5 percent downpayment with slightly higher interest rates of about a quarter to three-quarters of a point more than a traditional mortgage. Mortgage salesmen say the rates are more affordable than by financing improvements and appliance purchases by credit card, and the interest is tax-deductible.

The loans have not been the darling of the mortgage or real estate industry because they add layers of construction financing into what would otherwise be a straightforward home loan.

“Most companies can’t crack the code in terms of how to make these things happen,” Ross said recently.

© 2012 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin, Orlando Sentinel. Distributed by MCT Information Services.

* 마이애미 부동산 *

About jennyformiamihome

성심껏 도와드리겠습니다. 연락주시면 바로 상세히 답변드립니다. Jenny Shin / 신정미 부동산 (Broker's Real Estate) 남부 플로리다 마이애미 지역 한인 부동산 주택매매 렌트 싱글하우스 타운하우스 콘도 브라워드 카운티 마이애미 데이드 카운티 포트로더데일 웨스턴 코랄스프링 도랄 Rent or Buy single house, town house and Condo Miami Dade County / Broward County, fort lauderdale, coral springs, copper city, weston, doral 1398 SW 160TH AVE. SUITE 105 Weston, FL. 33326 Direct : 954-551-0236 Office : 954-384-1616 Fax : 954-697-0447 E-mail :


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Jenny Shin / 신정미 부동산
(Broker's Real Estate)
1398 SW 160TH AVE. SUITE 105
Weston FL 33326
Direct : 954-551-0236
Office : 954-384-1616
Fax : 954-697-0447
E-mail :


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