ComproTax Talks!

By John Mazzara

The Federal Housing Authority or FHA also offers the 203k loan that is for light rehabilitation to a dwelling that requires $35,000 in repairs or less. This is called the Streamline 203k loan. This loan is great for buyers who may pass on a home because it needs minor repairs. This loan is different from major rehab version of the loan by the same name and eliminates paperwork and simplifies the rehab fund process.

How it Works

The 203k Mortgage for light rehabilitation works for homes for sales as well as improvements to existing homes. Its features include 30 year fixed or adjustable loans, 110% loan to value ratio, appraised value is given after the improvements are made to enhance the homes worth, and is great for minor rehabilitation repairs or revitalization.

You must occupy the home within 60 days after the repairs are completed and funds are disbursed to the contractor you pick in two stages. First, a 50% materials draw is funded and when the completion of repairs is 100%, the remainder of the funds is released.

Quick Facts

The Streamline minor rehab loan may be calculated into the original loan balance creating one loan. It can be an adjustable or fixed rate and the mortgage balance can exceed the purchase price of the property. Borrowers do not have to hire professional engineers or architects. A home inspector or an appraiser will create a list of needed or recommended repairs or improvements and you can do the repairs yourself, or hire a contractor.

Eligible Rehab Repairs

This loan is used mostly for light cosmetic repairs not exceeding $35,000 and includes roofs, gutters, and downspouts. It may also be used for HVAC systems, electrical, plumbing, minor improvements to kitchens or bathrooms, flooring, interior and exterior painting as well as new windows and door and weather stripping and insulation. The 203k light rehab loan encourages funds for handicap accessible improvements, energy efficient additions, removing lead paint, and the addition of decks, patios, porches, septic and well system. A buyer may also purchase new kitchen appliances and a washer or dryer.

Ineligible Rehab Repairs

Items not eligible are landscaping and yard work and major remodeling or rehabilitation to any dwelling. It is also not for moving walls, adding rooms or fixing extensive structural damage.

What Are the Terms?

With the 203k light rehab loan, no minimum loan balance is required; however, buyers must intend to occupy the property once the light rehab repairs are complete. The property may not be vacant for more than 30 days and all work must be completed within six months. You do not have to hire a HUD approved contractor; however, a professional must complete your light rehab repairs. All repairs must commence within 30 days after the closing.

Who Does the Work?

This type of mortgage allows the buyer to select their licensed contractor and the lender will review the contractor’s experience. The lender will get a firm estimate from the chosen contractor and buyers may even arrange to complete some of the work themselves. If you go the do-it-yourself route, the lender will require documentation showing that you are qualified to complete the light rehab repairs.

Summary

The StreamlineK light rehab mortgage is great to make improvements to your owner-occupied home if the repairs are under $35,000. If the repairs fall below $15,000, the lender is not usually required to perform an inspection and a letter from the borrower is sufficient along with contractor receipts as notice of completion of work.

Perspective homeowners now have the option of buying a home in need of light rehab repairs and it’s a lot less paperwork than the major rehab version. The 203k Streamline line loan may also be used as a home improvement loan. If the home you are looking at needs minor rehab repairs, ask your lender to check on this mortgage loans availability.

Utilizing the IRS Offer in Compromise Program to Get Your Taxes Back on Track

The Internal Revenue Service’s Latest Changes to the their Offer of Compromise Program is more detailed than it has been in the past. The IRS Offer of Compromise Program was initially established decades ago and the latest changes do much to strengthen and formalize their program.

Requirements to submit an Offer of Compromise to the IRS include:

-A $150 non-refundable processing fee is required to be submitted with

When we talk about mortgages, we usually focus on interest rates alone. But there’s something a lot more basic to consider first. How long is the best mortgage term: 30 years or 15 years?

30 Year Versus 15 Year Mortgages

There are two key issues when it comes to mortgages. One, how can you make yourself eligible for the biggest loan with the smallest payment? Two, how can you find the interest rate that is the lowest possible? Of course these are vital parts of a mortgage, there is another issue that some people overlook altogether and end up losing money.

A mortgage term is very important for a few reasons. For one, it specifies how long you are obligated to pay the lender. For another, it decides how much interest you’ll be paying during the duration of the loan. In terms of equity building, these are really major concerns.

The longer you borrow money, the more

What is a loan modification?

A loan modification is a fixed and permanent change to one or more terms of a mortgage, resulting in more favorable interest rate and payment requirements for the borrower.

Is it different from “refinancing”?

Yes, refinancing a home loan requires the expenditure of closing costs, appraisal fees, origination, documentation and other junk fees. A modification simply changes the rate and mortgage payments of your existing loan.

Do I need an attorney?

In order to consummate

Obama’s Loan Modification program is giving hope to millions of homeowners who cannot afford their mortgage payments. This article describes how you can receive up to $5000 to help pay your mortgage.

How does it work?

The Pay For Success fund which is a portion of Obama’s loan modification program will reward homeowners who get a loan modification and can keep current with their new lowered mortgage payments. It sounds almost too good to be true: if you get a loan modification and you keep current with your new payments you will be rewarded with up to $5000!

How do I Qualify?

Not everyone can qualify and not everyone who could take advantage of this program will. Here is what you need to do.

1. Meet the requirements of Obama’s Loan Modification Program
2. Apply for a loan modification
3. Make your new lower monthly payments on time for 1 year
4. Receive $1000 for every year you do not miss a payment, up to 5 years

Therefore the total amount of money you could receive from the program is $5000, the money will go to pay down your mortgage.

What are my next steps?

Obama’s loan modification program aims to reduce your monthly payment to equal 31% of your gross monthly income. This percentage is often referred to as your debt ratio and is a critical component to getting qualified. It is important for you to know what your current debt ratio is and what your monthly payment would be if your debt ratio were lowered to 31%. The calculation of your debt ratio is not difficult you only need to spend some time researching and collecting the required information. Understanding your financial position is your next step, loan modification kits can help you with this process.

Once you understand your financial situation you can apply for a loan modification and since Obama’s program has been launched your chances of success have never been better. To apply for a loan modification you need to fill out several forms and provide financial statements that all lenders require.

To fill out these forms you can hire a loan modification company which would charge $1500-$3000 or you can fill them out yourself, but you must ensure you have all documentation required since missing forms can significantly delay your application.