Fixing up a fixer-upper, and financing the cost!

Posted: December 7, 2012 in energy efficient mortgage, Home Financing, Obtaining Mortgage, remodeling
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Did you know that you can borrow extra money, for which you don’t have to qualify, to make energy efficient repairs immediately upon close of escrow?  There are actually two programs I would like to tell you about.  One is the Energy Efficient Mortgage (EEM).  You can get up to an additional $12,400 to replace HVAC, windows, insulation, etc., for which you do not have to qualify.  During escrow, an assessment is performed to see what you need, and what improvements you would like to make.  After close of escrow, contractors perform the work, and then are paid with funds that were set aside from your loan proceeds.

The other program is an FHA 203k streamline loan.   For this program, you must qualify for the additional funds, but you can borrow up to an additional $35,000 to bring the home up to FHA standards and make improvements you desire – these improvements are not required to be energy efficient upgrades.  You can do carpet, paint, appliances – all kinds of cosmetic items – you just can’t make structural changes to the home.  During escrow, you get bids from contractors, turn them into the lender, and from that point, it works generally like the EEM mortgage.  After close of escrow, the contractors receive a partial payment, and once the work is done, it is inspected by an independent evaluator prior to the contractor receiving payment in full.
And one more thing, you can use BOTH of these programs together!  Your lender will evaluate which program, or if a combination of both, is right for you.

In addition to the 203k streamline loan, and the EEM, you can ALSO get up to a $4,000 rebate from Energy Upgrade California.  The assessor estimates how much you will save on your future energy bills and the rebate is based on your expected savings.  For example, if they estimate that you will save 30% on your utility bills, you can get a $3,000 rebate.  Go to http://www.energyupgradecalifornia, type in your zip code, and you will be furnished with a list of contractors.  You must use contractors from the list to be eligible for the rebate.
Also, if you have a home to sell that needs work, we can market this home as being eligible for an Energy Efficient Mortgage, and increase the number of potential buyers for your home.  Many agents are not aware of the EEM and will state in the listing that it “does not qualify for FHA financing,” and this is simply not true.
If you would like to know more about these programs, call me to learn more, and I’ll introduce you to a qualified lender.

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