Let’s get ready to PURCHASE & RENOVATE

Have a vision? Remodeling your

upcoming purchase with a Renovation Mortgage should be a smooth and rewarding experience.




Start your pre-qualification process with a USA Mortgage banker to find out your total purchase price eligibility. Total purchase price is equal to your sales price + renovation bid + 20%-35% of the bid.

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Start looking at homes that meet your requirements unit count, lot size and location. Bridge the market options and your home goals with a bid from a contractor you select and trust. Remember, we’ll use their bid to help establish your property’s future value—a key factor used in the loan decision process.

PREPARE FOR UNDERWRITING Once your offer and bid are finalized, allow time for your mortgage to be processed and underwritten. Don’t make changes to the scope of work or contractor during this time and keep a look out for updates on your renovation and credit review.


With homeowner and lender approval, a contractor may be eligible to receive funds at close to help get the project started. We’ll go over this with you and your contractor long before the closing table! You will also receive a draw welcome letter once the rehabilitation escrow is ready for disbursing.

Sales Price + Hard Costs + Options + Soft Costs = Total Budget .H.OP.S.


Until under contract, this will be your offer price. You and your agent can adjust your offer based on your max total budget and total renovation estimate. Total renovation costs (H.OP.S.) usually is between 20-35% higher than the contractor’s bid.


These are budgets that a remodeling customer would have, regardless of how they chose to pay for the project.

Bid Contingency Permits Plans

When value supports and the project prohibits a customer from moving in within 30 days of closing, many clients elect to finance mortgage payments for the time their renovated home is not livable. OPTIONS


These are standard costs affiliated with the renovation mortgage and are financed into your loan amount. Example: if your soft costs are$795, the down payment is increased by about $30 for a 3.5%

It’s OK to place on offer on a

home without having all of the pieces. Many


customers use S.H.OP.S. to get

started with confidence.


Every day without a bid can add 3-5 days to your earliest close date. Prioritize your selections!



Each contractor must provide the below for our review:

A HUD Consultant may be needed. They can provide:

Feasibility Study

Work Write-Up



Draw Inspections & Approvals

Preliminary Plans



Direction & Advice

Draw Acceptance

Most projects prohibit more than one general contractor.



You’ll receive a series of documents to be signed prior to closing. These items will be completed and delivered to you and the contractor for review and signatures.

Bids must follow Uniformed Contract Guidelines to help prepare for closing and smooth draw administration. Not sure how to get there? Our experts will help!

Review of Original Bid


We Help Perfect Formatting

We Send for Review & Signature

StandardK, HomeStyle STANDARD PROJECTS Most renovation customers that intend to purchase and remodel in one mortgage product need a loan program that supports major and minor repairs. Your remodel vision and loan eligibility will be reviewed by the construction department and mortgage banker to determine the best program for your needs. We’ll also ensure your contractor is prepared for the draw process for the loan program you close with.


Home Addition

Roof Replacement

Open Floor Plan

Mixed Use Conversion

Whole Home Remodel

Foundation Repairs


203K, VA, HomeStyle

Work that does not change the floor plan or foot print of the home.

Work that does not require plans or an engineer.

Work that does not impact the structural support system in any way.

Work that does not prevent borrower from occupying for a period greater than 15 consecutive days.

Work costs that do not exceed $27,000.


Fresh Coat of Paint

Kitchen Update

New Flooring

Mechanical Repairs

If under $5,000 must close with an FHA Limited 203k.

Bathroom Update

Roof Repairs


Determining the max loan amount, minimum required value, down payment, and optimal loan program

With all of the pieces in place, a renovation max mortgage worksheet is how your down payment, max loan amount and loan structure are assembled.

Using the property’s completed value, final sales contract, and renovation budgets, a max mortgage worksheet is generated.

Questions? Ask your Mortgage Banker!



a. FTHB - One Unit Primary


A Loan Parameters 1 Applicable Max LTV

97.00% 29.32%

2 Renovation costs as a % of Adjusted Value

First Time Homebuyer

B Property Information 1 Sales price



2 Eligible Mortgage Payoff(s) 3 Estimated after improved value

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

212,220 235,000

4 Final Value

1-Unit Primary

C Financed Alterations 1 Bid amount

50,000.00 7,500.00 500.00 800.00 250.00 500.00 1,750.00 62,219.50 2,500.00 64,719.50 212,219.50 212,219.50 205,852.92 919.50

2 Contingency

$150,000 Sales $50,000 Bid $235,000 Value Total Renovation $64,720 Total Acquisition $212,220 Max Financing $205,852 Down Payment $6,338

3 Arcitecht / Engineering Fees

4 Consultant fees 5 Inspections 6 Title Updates

7 Permits

8 Payment Reserve 9 Supplemental Origination & Draw Admin

10 Subtotal of financed alterations

11 Paid in cash contingency

12 Total rehabilitation escrow amount

D Loan amount 1 Total of Purchase Price and Improvement Costs

2 Value

3a Purchase max mortgage amount

During our contractor review process, a renovation expert will discuss these details with your contractor to make sure they understand the post close steps to complete the project. CLOSE, THEN START

The way your contractor is paid is determined by the loan guidelines you closed with.



Ensure any payments you anticipated at closing have been delivered. Usually, these are made available at closing. If you think your contractor is owed funds at close, please check with title and then email

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APPLY FOR ANY REQUIRED PERMITS Prior to closing, you would have signed a permit certification form. All progress draws are contingent on required permits and city inspections being completed. Don’t miss this step!


Withing 10-25 business days from loan closing, the draw administrator will deliver a welcome email notifying you that the escrow account is setup and ready for disbursement. Let them know if you are ready for draws.

COMPLETE PROJECT As work is completed, you and your contractor will request draw inspections and progress payments. Once the home is complete, any change order or contingency requests can be processed along with any principle reductions.

2707 Colby Ave. Suite 1212 | Everett, WA 98201 • 3133 W. Frye Rd. Suite 101 | Chandler, AZ 85226 1737 N. Wenatchee Ave. | Wenatchee, WA 98801 • 2302 W. Dolarway Rd. Suite 2 | Ellensburg, WA 98926

Branch NMLS: 1821371, 1821357, 1899923, 1846471. Company NMLS: 227262. Not a commitment to lend. Additional terms and conditions apply. DAS Acquisition Company, LLC is not affiliated with or endorsed by any government entity or agency, including USDA, HUD or VA. Headquarters: 12140 Woodcrest Executive Drive, Suite 150, St. Louis, Missouri 63141, Toll Free: (888) 250-6522. For licensing information, go to: AZ Lic #0942577, Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act. Licensed under the Oregon Consumer Finance Act.

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