3. METODOLOGÍA
3.2. Determinación de parámetros constructivos y técnicos
3.2.1. Dimensionamiento de las manos de banano
Homebuyers who purchase a property with cash can refinance the property using a 203(k) within 6mos of purchase, the same as if the buyer purchased the property with a 203(k) insured loan to begin with. Evidence of interim financing is not required; the mortgage calculations will be done the same as a purchase transaction. Cash back will be allowed to the borrower in this situation less any down payment and closing cost requirement for the 203(k) loan. A copy of the sales contract and the HUD-1 settlement statement must be submitted to verify the accepted bid price (as-is value) of the property and the closing date.
Appraisal Requirements
MiMutual must establish both an Adjusted As-Is Value and an After Improved Value of the property. An appraisal report by an FHA Roster Inspector is always required to establish the After Improved Value of the property. Except as described below in cases of property flipping and refinance transactions, MiMutual is not required to obtain an as-is appraisal, and may use alternate methods mentioned below to establish the Adjusted As-Is Value. If an as-is appraisal is obtained, MiMutual must use it in establishing the Adjusted As-Is Value.
The appraiser must be provided with a copy of the Consultant’s Work Write-Up and Cost Estimate at assignment.
Adjusted As-Is Value
MiMutual must establish the Adjusted As-Is Value as described below.
Purchase Transactions
For purchase transactions, the Adjusted As-Is Value is the lesser of:
The purchase price, less any inducements to purchase; or
The As-Is Property Value, if provided
The As-Is Property Value refers to the as-is value as determined by an FHA Roster Appraiser, when an as-is appraisal is performed.
In the case of property flipping, MiMutual must obtain an as-is appraisal if needed to comply with the property flipping guidelines.
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Refinance Transactions
Properties Acquired Greater Than or Equal to 12 Months Prior to Case Assignment Date MiMutual must obtain an as-is appraisal to determine the Adjusted As-Is Value when the existing debt on the property plus the following items exceeds the After Improved Value:
Financeable repairs and improvement costs;
Financeable mortgage fees; and
Financeable contingency reserves
When an as-is appraisal is required, the Adjusted As-Is Value is the As-Is Property Value.
MiMutual has the option of using the existing debt or an as-is appraisal to determine the Adjusted As-Is Value when the existing debt on the property plus the following items does not exceed the After Improved Value:
Financeable Repairs and improvement costs;
Financeable mortgage fees; and
Financeable contingency reserves Existing debt includes:
The unpaid principal balance (UPB) of the first mortgage as of the month prior to mortgage disbursement;
The UPB of any purchase money junior mortgage as of the month prior to disbursement;
The UPB of any junior liens over 12 months old as of the date of mortgage disbursement. If the balance or any portion of an equity line of credit in excess of $1,000 was advanced within the past 12 months and was for purposes other than repairs and rehabilitation of the property, that portion above and beyond $1,000 of the line of credit is not eligible for inclusion in the new mortgage;
Interest due on the existing mortgage(s);
Mortgage Insurance Premium (MIP) due on existing mortgage;
Any prepayment penalties assessed;
Late charges; and
Escrow shortages.
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FHA 4000.1 Underwriting Guidelines | Standard 203(k) Properties Acquired Less Than 12 Months Prior to Case Assignment Date
For properties acquired by the Borrower within 12 months of the case number assignment date, an as-is appraisal must be obtained.
The Adjusted As-Is Value is the lesser of:
existing debt plus fees associated with the new mortgage; or
the As-Is Property Value.
Existing debt includes:
the Unpaid Principal Balance (UPB) of the first mortgage as of the month prior to mortgage Disbursement;
the UPB of any purchase money junior mortgage as of the month prior to mortgage Disbursement;
the UPB of any junior liens over 12 months old as of the date of mortgage disbursement. If the balance or any portion of an equity line of credit in excess of $1,000 was advanced within the past 12 months and was for purposes other than repairs and rehabilitation of the property, that portion above and beyond $1,000 of the line of credit is not eligible for inclusion in the new mortgage;
interest due on the existing mortgage(s);
MIP due on existing mortgage;
any prepayment penalties assessed;
late charges; and
escrow shortages.
For properties acquired by the borrower within 12 months of the case assignment date by inheritance or through a gift from a family member, MiMutual may utilize the calculation of Adjusted As-Is Value for properties acquired greater than or equal to 12 months prior to the case assignment date.
After Improved Value
To establish the after improved value, MiMutual must obtain an appraisal of the property subject to the repairs and improvements.
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Acceptance of Contractors and Rehabilitation Criteria
MiMutual must ensure that a qualified general or specialized contractor has been hired and, by contract, has agreed to complete the work described in the work write-up for the amount of the cost estimate and within the allotted time frame.
Self-help arrangements only allowed for appliances / materials / supplies. Labor/installation by the borrower not permitted. All receipts for reimbursement through the repair escrow account must be dated after the loan closing date.
Estimates for the work to be done must be provided by the contractor(s) using MiMutual’s 203(k) Contractor Proposal (or a similar document containing the same information). All repairs / improvements must be itemized, both materials and labor.
MiMutual must accept all contractor(s). The Contractor Acceptance Form must be completed for each project, and must be submitted to MiMutual with all required attachments:
o Signed and dated W-9
o Certificate of Liability Insurance (local requirements will dictate minimum insurance coverage required for the contractor)
o Copy of license (required unless state does not require contractor licensure)
o Letters of reference or contact information from customers and suppliers (required when no license is available)
The contractor acceptance process involves verification of the following items:
o The contractor’s name (not DBA) appears on all forms o The contractor has been in business for at least 3 years
o The contractor’s primary employment corresponds with the work to be completed
o The contractor’s experience shows they have completed projects of similar scope within the last few years
o The contractor has experience with projects financed by FHA 203(k) or Fannie HomeStyle, as applicable
o The customer references provided good reviews of the contractor’s work and performance o The supplier references provided acceptable comments concerning payment
o The insurance meets all minimum local requirements o The acceptance form is signed and dated
o
If the contractor is licensed, confirmation of the copy of the license provided and that it is current A General Contractor is not required. **It is strongly recommended to use one (1) General Contractor when no specialization is required for repairs (i.e. lead based paint, mold remediation, etc)
Work write-up and cost estimates will be reviewed and must be approved by MiMutual to ensure the planned work meets all program and repair requirements as noted by the appraiser/inspector. Cost estimates must clearly state the nature and type of repair and the cost for completion of the work item. MiMutual must also review the work write-up to ensure that all health and safety issues identified were addressed before, including additional work items.
o A written proposal and Cost Estimate must be obtained from a contractor for each specialized repair or improvement. MiMutual must ensure that the selected contractor meets all jurisdictional licensing and bonding requirements (per Contractor Approval Process described above). The Cost Estimate must state the nature and type of repair and cost for each work item, broken down by labor and materials, using MiMutual’s 203(k) Contractor Proposal (or a similar document containing the same information)
o When an appraisal report identifies the need for health and safety repairs that were not included in the consultant’s work write-up, borrower’s work plan, or contractor’s proposal,
FHA 4000.1 Underwriting Guidelines | Standard 203(k)
Only “fixed price” contracts, which are subject to written change orders approved by the underwriter in the event of unforeseen conditions, are acceptable. “Cost plus” or “time and material” contracts are prohibited. The repair cost must be reasonable and customary for the area in which the property is located.
The contractor(s) must finish the work in accordance with the written estimate and the Homeowner/Contractor Agreement as well as any approved change order.
After review, the selected contractor(s) must agree in writing to complete the work for the amount of the cost estimate and within the allotted time frame. (See 203(k) Homeowner Contractor Agreement posted on our website).
The Rehabilitation Construction Period begins when the mortgage is recorded, and must begin within 30 days of closing.
Any repairs that have already been completed cannot be included in 203(k) financing.