CONSTRUCTION SOLUTIONS

For the creative ones, build that dream home, rehab that handy-man special or improve your current residence.
American Ideal Mortgage can finance anyone's dream home, The Country Castle or The City Loft.

Construction/Permanent Solutions One Settlement Construction Loans and the Second Streamline Settlement that Will Give the Program Mix That You Desire As Little As 5% Down Extend Locks To 9 Months Build Your Own Home, You Are The General Contractor

LOT PURCHASE SOLUTIONS

Still looking for the right house design, but you've found the right lot. Finance it through American Ideal Mortgage.

• Interest Only
• 3 Year Balloon
• 15 Year Fixed

INTRODUCTION TO THE 203(k)

• What is a 203(k)?
• What kind of projects can (and can't) I do with a 203(k)
• What size project can I finance with a 203(k)
• How do the escrows work on a 203(k)
• How do I get started and what will I need?

203(K) OVERVIEW

The 203(k) is HUD's primary program for the rehabilitation and repair of single family property. It is viewed as an important tool for community and neighborhood revitalization and for expanding home ownership opportunities.

WHAT MAKES THE 203(k) DIFFERENT?

Most mortgage programs will only allow property to be appraised in an as-is condition, not taking into account the potential value of a property after it has been renovated. In many cases, property in need of renovation, is not eligible for financing. The 203(k) mortgage is unique in that it provides funds for a borrower to purchase an existing property in as-is condition and rehabilitate it to their liking, and like other FHA loans, it can be done with little money down. If the borrower already owns the property, the 203(k) can also be used as a refinance tool, so that monies are made available for the rehab or improvement.

HOW DOES IT WORK?

We provide a 203(k) loan for the total amount of acquisition plus rehabilitation coasts. At settlement the money is divided. The seller is paid for the purchase of the property, and the balance is put into an interest bearing escrow account to pay for the rehabilitation costs. The escrowed monies are disbursed as the work is completed.

CAN IT BE USED ON A MULTI-UNIT PROPERTY?

The 203(k) may be used to rehab any owner occupied residential and mixed-used property with no more than four units. It can also be used to convert the number of units a property contains.

GENERAL FEATURES AND BENEFITS

• Cost of materials, labor and permits can be financed in addition to any architectural fees, inspection fees and up to 6 monthly mortgage payments
• 3% Down Payment (purchase price + repairs + allowable closing costs)
• 30 & 15 Year fixed or adjustable rate programs
• The mortgage is fully assumable when the home is sold
• Up to 6 mortgage payments can be financed during rehab
• Portions of the projected rental income of the property may be included in qualifying for the mortgage
• Draws paid to contractors based upon the satisfactory completion of specified work (no work,no money)
• Mandatory cost overrun reserve of at least 10% of the rehab estimates is required and included in the mortgage amount. Unused reserves are used for additional repairs or to pay down mortgage principle

ELIGIBLE 203(k) IMPROVEMENTS

Eligible Improvements: (minimum $5,000)

• Structural alterations and reconstruction to the structure, finished basements, room additions, decks, etc.
• Changes for improved functions and modernization such as remodeled kitchens or bathrooms
• Reconditioning and / or replacement of plumbing, heating, air conditioning and electrical systems.
• Roofing and Sidewalk repair
• Flooring, tiling and carpets
• Lead paint abatement
• Energy conservation improvements
• When multiple improvements are involved totaling at least $5,000, related build up fixtures such as cooking ranges, dish washers, as well as decks, general painting and decoration are also eligible.

INELIGIBLE IMPROVEMENTS:

Improvements that do not become part of the real property
Recreational or luxury improvements such as, swimming pools, exterior hot tubs, saunas, etc.
Equipping, Refurbishing or Adding-on to property for commercial use

GETTING STARTED WITH A 203(k)

Pre-Application:

• 1. American Ideal Mortgage Loan Officer meets with potential borrower for pre-qualification to review:
  Income
  Credit History
  Availability of Sufficient Assets (or gift funds) for closing
• 2. Borrower finds property
• 3. Market survey is conducted to insure that the property values in the immediate area support the improved value of the subject property
• 4. Borrower decides what is to be done to the property
• 5. Estimates are obtained & plans are formalized
• 6. The loan process begins

Full Application

• Borrower and loan officer meet for formal loan application.
  The following items are needed:- Contract of Sale on subject property (signed by all parties)
• Copy of Deposit Check
• Copy of Social Security Card & Photo ID
• Most recent pay stubs
• Most recent W-2 statements(if self-employed or commissioned, 2 most recent complete 1040's and year to date financials)
• Most recent bank statements
• List of liabilities- including names, addresses, account numbers, minimum payment, and approximate balance.
• Complete 2 year residence history (including Names, Addresses, Account numbers, Minimum pmt. Required & approximate balances)
• Complete schedule of real estate owned (if applicable), including property addresses, purchase price & date, current value, tax & insurance info., and rental income information (include copies of leases)

203(k) ESCROWS

• Up to five draws can be requested to pay for the rehab work
• Before each draw, the FHA Plan Reviewer, will inspect and authorize a draw
• Draw checks are made out to borrower for disbursement to contractors
• Before final draw, all permits required by locality must be provided
• Any money not used in the rehab may be used for additional repairs or to reduce the principle balance of the loan. Other than interest on escrowed funds, no cash may be disbursed to the borrower