St. Louis Mortgage Help


Did you know that FHA allows for credit scores down to a 500 score? Then why are you hearing from other lenders that they can't help you unless you have a 640 credit score? Because of their own overlays to the FHA underwriting guidelines or because the mortgage loan officer has no ability, knowledge, experience, or mostly they just don't want to mess with it.

I have been a mortgage loan officer and/or FHA underwriter since 1996 and every month it seems that I am helping new home buyers who were turned down, turned away, or thought they could not qualify.  

Did you know that FHA provides a list of compensating factors that you as a borrower can bring to the application to off-set the bad credit items. Go to my website at and under TIPS and TOOLS you will find everything you need to know about compensating factors......I would bet that you already have one or two compensating factors to improve your situation, and that is normally enough to get you approved.

Did you know that there is a FORMULA to approve borrowers if the automated underwriting system turns down your application. With most lenders when the 'machine' turns you down that's the end, they have no ability to have a real human Underwriter review your application and apply a common sense approach to you and your circumstances.

FHA came out with a formula that tells the Underwriter that if you match up to what the formula asks for in regards to your exact situation then you are an automatic approval. That's right, an automatic manual underwriting approval! Want to learn more about the Formula? CLICK HERE

I know that we have all heard that it so difficult to get a mortgage today and especially so if your credit is less then perfect, it can be if YOU are not doing your homework ahead of time. Go to and do your homework now so that you can purchase your next new home now or soon.

Then contact me, I want to help, I want to be there from the start to the end, I want to see you closing on your next new home.

Posted by Bob Rutledge on March 4th, 2016 9:21 AM

I see it every month or hear stories from fellow loan officers that before getting our home buyers under contract on the right home can turn even the most stoic shopper into a bit of a dreamer. From paint colors to planting a garden, picturing yourself in that property is critical for many buyers. It is the house and everything about that next new home that all home buyers consider but I ask that you leave a little room for pragmatism. Remember that getting pre-approved for a mortgage is a first step necessity but once you have that pre-approval, even once you are under contract isn’t a guarantee that you will be APPROVED. That prefix attached to approval is there for a reason, a loan pre-approval is not loan approval.

A better name for pre-approval is truly pre-qualification but that term is not welcomed generally by the seller side of the house you want to purchase, so we play the game. Once you are pre-approved, you have found your home and are under contract you will have more hurdles to clear before a lender legally commits to funding your home loan. Buyers who don’t know any better can inadvertently add obstacles to that path or home ownership or even kill the entire application, between contract and closing day.

Some missteps can be costlier than others. Here’s a look at five of the worst things you can do before buying a home.

1. Go Credit-Crazy

It’s almost become cliché in the mortgage industry, but the warning still bears repeating: Don’t buy a truckload of furniture until after your loan closes. The prohibition goes beyond sofas and tables avoid obtaining credit for any major expense, such as a car, a boat or, yes, a new bedroom set.

Be careful with even minor expenses. If you absolutely need to obtain new credit or add debt before closing, talk with your loan officer as soon as possible. We are now required to check your credit report for new debts and increased monthly payments on your credit cards 24 to 48 hours BEFORE you close to insure that your debt to income ratio has not changed enough to wreck your approval.

New payments are going to affect your monthly debt-to-income ratio and not in a good way. Hard inquiries on your credit report could also lower your credit score. That might hurt your interest rate if you haven’t locked or even knock you out of qualifying range all together.

2. Shuffle Dollars and Cents

Lenders will scour your most recent bank statements as part of the pre-approval and approval process. It’s not like they forget about it after that. They will take another look at your assets and bank records again during the underwriting process and possibly afterward you have an approval.

You will need to explain any unusual deposits or withdrawals. Lenders will require clear documentation and a paper trail if you’re putting gift funds toward a down payment or closing costs. Stuffing a wad of undocumented cash into your account is going to raise red flags. By law, The Patriot Act, we are required to source and season all funds used in a mortgage transaction, this can take time, and possibly kill an approval if we cannot use the money that is in your bank account.

3. Get Behind on Bills

Having a late payment hit your credit report before closing can devastate your deal. Payment history comprises about a third of your credit score.

One solitary 30-day late payment can clip 60 to 110 points from your credit score, especially if you have a very light credit history. And 2 recent 30 day lates is almost always a major concern for an Underwriter. If you have low credit scores and anything below 660 is considered low a credit blemish or inquiry could change the outcome of your approval or change your interest rate, but it isn’t always a huge deal if you had an 800 score, right?

Possibly. But if that 30-day late blemish is a mortgage or rent payment, some lenders will deny your application altogether. Many will require at least 12 consecutive months of on-time payments to qualify for a home loan.

4. Co-Sign on a Loan

Co-signing a loan is arguably a bad financial move whenever you make it. But it’s especially risky during the mortgage lending process. It means you’re financially liable for someone else’s debt. I have seen more co-signed notes become the death of a new mortgage application than you would ever think possible, they are family, they are friends, they would never do anything to hurt me.

Yes, that someone else might be the most responsible person on the planet. Lenders will still need to factor that new monthly obligation into your overall affordability profile. Adding one more debt to the list could stretch too thin your debt-to-income ratio and assets.

5. Changes in Employment

Probably goes without saying, but losing your job is going to be a big problem. Even job-hopping can present some major hurdles. Lenders crave stable, reliable income that’s likely to continue.

Lenders are likely to slam on the brakes if you take a new job in a different field  or if you decide to start your own business, or even if you get a promotion but see some or all of your income shift to a commission basis.

The bottom line: Any change to your employment is significant. Keep your loan officer in the loop, and ask questions when in doubt. The last thing you want is to waste time and money on a home loan you’re never going to get.

Throughout the mortgage process, it can also be helpful to monitor your credit scores for changes so you can know whether you need to address any problems. To do that, you can use a free tool like’s Credit Report Card, which updates your credit scores and an overview of your credit report every month.

You Loan Officer is not your nemesis, just the opposite, I tell my clients that in today’s mortgage world every borrower comes to the Underwriter as guilty. It is my job as your loan officer to act on your behalf to collect all the necessary information and data to prove your innocence. The more I know the better I can represent you and package your loan application in the best light possible. Do Not Doubt for a minute that eventually we will find out everything, best to tell your loan officer everything up front and during the process so there are no last minute surprises. ONLY GOOD SURPRISES ARE ALLOWED AT THE CLOSING TABLE!

Posted in:General
Posted by Bob Rutledge on March 9th, 2014 10:55 AM

The spring and summer months are traditionally the busiest times of year for the residential real estate market, and locally that will be truer this year. It is a safe bet that the weather will be more cooperative and many families like to move while the kids are on their summer break.

Also, in recent years spring, for many regions, has meant more homes on the market and with inventories so low we need more homes on the market, as well as more buyers. With more buyers and a lower than normal inventory we will see fierce competition for the homes that are being sold and an increase in prices.

If you are in the market for a house this spring, there are a number of steps you can take to try to give you an advantage over other homebuyers, including;

  • If you're going to work with a Realtor or real estate professional, get started early. Interview three or four, get references, research them online, and let the person you choose know exactly what you're looking for. This means you must know what you want, where, whys, and hows. The best agent for you is the agent that will work with you, how you want to work, they will accommodate your needs, situation, circumstances, and preferences. Always keep in mind they know real estate you know you.
  • Get yourself at least pre-qualified better yet, pre-approved. This will give an advantage on several fronts. First, it will be done and out of the way. Second, you'll know how much a mortgage lender is willing to loan you so you know in which price range to look. And third, it shows sellers that you're serious and ready to buy when you make an offer.
  • Figure out how much you have for a down payment. NAR says first-time buyers typically make a down payment of 6 percent on a home purchase, and 24 percent of down payment funds were gifts from relatives or friends. If that's not an option, there are many loan programs that accept down payments of five percent or less. And don't forget closing costs, which will often run two to seven percent of the property's purchase price. I am a bit biased but just as it was suggested before about interviewing and searching for the right real estate professional the same is true about mortgage providers. WE ARE ALL NOT THE SAME! Know what you want and need in how you will finance your next new home and find that lender that can provide it. Speak with a wide range of lenders, talk with a bank, talk with a mortgage lender, do your research, ask questions. Your mortgage will be your biggest investment that you may ever make, do so wisely.
  • Once you have your team is in place be ready at a moment's notice. If you're in an especially tight market (which we are), your Realtor will be reviewing new listings as soon as they're available. If he or she finds something that matches your criteria, you will want to look at the house and be ready to make an offer -- quickly.
  • When looking at houses, look at the potential. There are major factors you won't be able to change -- the neighborhood, proximity to work and schools, the basic floor plan of the house (unless you plan on renovating), and size of the back yard, among other things. If you're put off by paint or carpet color or old linoleum floors, envision what the walls will look like with your color of choice and the floors in a material you prefer. Look at all homes with an open mind, you may never find that perfect home but more than likely the near perfect will have to do. But NEVER EVER settle, this is wrong as your home will always be your place of refuge and must represent to you and your family as your place to go for peace of mind.
  • Right now you will be buying in a seller's market, listen carefully to your Realtor or agent about how much you should offer. If there's competition you may want to offer more than the listing price and you should consider whether to try asking for things like carpet allowances or a long closing date. If you know the sellers may have several offers in front of them, you'll want to make yours the best. This is when your team working for you may be able to help provide alternatives that can help with making the strongest offer. This is especially true of your lender teammate, we can possible structure your financing to provide you with what you would have asked the seller for in a buyer’s market.
  • Begin thinking about homeowners' insurance now. Begin by making sure your credit report is accurate -- credit histories are sometimes used to determine whether a company will insure you, and, if so, at what rate.

With the current housing market be such a seller heavy market many of my home buyers are having a difficult time securing their new home simply because there are so few homes available at the moment and many more home buyers.

Assemble your team members now, allow them to make your game plan, get you prepared, and then act. Your real estate agent knows the market, they understand negotiating, and are willing to share and provide it all to you.

Your lender will know you and your financial situation better than anyone else but you, tell them everything, share with them your wants and needs. We can shape a mortgage program to provide you or nearly any home buyer with what they need. You need help with down payment and/or closing costs most lenders can accommodate this need. You are willing to purchase a near perfect home many lenders can provide mortgage programs that will roll in the costs of making your near perfect home perfect.

Posted in:General
Posted by Bob Rutledge on March 7th, 2014 1:20 PM

With housing prices on the rise again and the inventory of available homes at near record lows, buying a home has become quite challenging for any home buyers but especially first time home buyers  with a small budget. If you’re still looking for a sizable home, but don’t want to shell out the big bucks, investing in a fixer-upper house could be a great option for you. With a little bit of work, you could turn a less than perfect house into your dream home, especially if work with an experienced loan officer plus a contractor to do the repairs. However, paying for the house and the repairs might be difficult because many lenders don’t want to finance a house that requires a lot of work. 

The FHA 203k Renovation Home Loan is the perfect mortgage for those who want to have all the houses listed for sale available to them, won’t settle, dreams of what their home will look like, and is willing to think outside the box. The 203(k) loan includes funds for the purchase, repair/improvement costs, inspection fees, and even six month’s carrying costs.

The program is primarily designed to finance the renovation of homes which serve as the principal residence. Eligible properties are one to four dwelling units that have been constructed for at least one year. The units have to comply with local zoning regulations. Loans might apply to houses moved from one site to another for renovation. Furthermore, also current homeowners can also use the 203(k) loan to refinance existing mortgages. The program has a six-month deadline for completion, though there are extensions available if warranted. 

There are two different 203(k) loan options for homebuyers, depending on the scale of the home renovation project. The standard 203(k) program starts with a feasibility study, overseen by an approved consultant, which helps the FHA determine whether the home repairs are justified. Together with the lender, the consultant monitors the project’s progress and conducts a final inspection after completion. The streamlined version is for smaller, less complex projects where no permits, plans or specs are needed. In addition, the homeowners don’t need a consultant and can just use a certified contractor.

Below are the basic steps that you need to do if you want to finance your fixer-upper though the 203(k) loan program.

  1. Figure out what you can afford.
    First, you need to determine how much you can spend on a new home. Current 203(k) loan programs are 3.5% down and the minimum loan amount is $5,000. Contact Bob Rutledge with USA Mortgage to see for what loan amount you would qualify based on your income and taxes. Yet, keep an eye on what you can actually afford and don’t stretch your budget too much. You should also check if the cost of the house plus renovation exceeds check the HUD’s maximum mortgage limit in that area.
  2. Find a house with potential.
    It is smart to find a fixer-upper in a desirable location as this would significantly increase the house’s market value after its renovation is completed. I tell my home buyers to find that near perfect house, that house that meets all your needs except the condition of the house, because the FHA 203k will fix the condition of the house that will be your next new home.
  3. Execute a sales contract.
    To do this you must have an experience Real Estate Agent working for you, one that is not afraid of the FHA 203k. Some agents are afraid of the FHA 203k because of loan officers who ‘try to close a FHA 203k but fail. You need to have a sales contract for the home you wish to renovate in order to proceed with the 203(k) loan application process. The contract has to include a clause stating that the sale of the house is contingent on your ability to receive financing through the 203(k) program. You can also ask the seller to pay the closing costs as this would lower the amount of money you would need to complete the purchase.
  4. Apply for the 203(k) loan.
    Find a Lender/Loan Officer highly experienced with the FHA 203k, it will save you money, time and headaches. These loans are approved every work day of the year, the qualification for all borrowers is no different than a normal FHA loan, there is a little extra work because of the renovation work addition to the application but it isn’t something to be concerned about. A normal FHA 203k can be closed in 45 days, after sales contract acceptance and mortgage application, give or take 10 days.
  5. Find a contractor.
    Sometimes I will advise that you find a contractor as soon as possible especially if you know for sure you will utilize the FHA 203k, this step could come in before you find a house. The 203(k) program requires that the renovation be performed by a qualified contractor as approved by the lender. Your Loan Officer if experienced with the FHA 203k will have a list of qualified contractors to refer to you to choose from. Having the right contractor in place as soon as possible is the key to the smoothest loan application from start to finish.
  6. Get an estimate by a consultant/contractor.
    Since the amount of the 203(k) loan cannot be changed once the application is approved, it is crucial to get an exact as possible estimate of the renovation expenses prior to construction. 203(k) loans require at least a 10-20% contingency reserve for unexpected expenses. The best way to estimate the costs is by hiring a contractor familiar with the FHA 203k, then your Loan Officer/Lender and a HUD Consultant we hold a Summit Meeting at the house with you to determined what must be done to the house to bring your home up to HUD minimum standards along with your wish list.
  7. Get an appraisal. The appraisals will have two values, one for the current value of the house (“as-is”) and another one for the estimated value of the house after the repairs (“as-completed”). The loan amount should not surpass either the “as-is” value of the home plus the cost of repairs or 110% of the estimated “as-completed” value.
  8. Close on the home.
    When your 203(k) application is approved, you can purchase your fixer-upper home. If you can’t move in right away, you can roll in six months of mortgage payments that can be included in your loan to pay the mortgage and live somewhere else for the time being. But, this must be determined before the final loan approval, be approved by the HUD Consultant and is best to be worked into the initial loan application.
  9. Adhere to the schedule.
    You have to make sure that the renovation work is being completed within the six-months deadline. The repair fund is held in escrow and is disbursed in installments to the contractor (or to you, if you’re doing the work yourself). A HUD-approved inspector will review the progress of the renovation before each disbursement is made.
  10. Get a final inspection.
    Once the work is completed according to the initial agreement, you will have to get a final inspection. If any money is left over (e.g. if you did the work yourself), it will be applied toward the principal of the loan.
Posted in:General
Posted by Bob Rutledge on February 25th, 2014 1:49 PM

The HARP or Home Affordability Refinance Program has made a small but significant change that will help more homeowners in the St. Louis and St. Charles area, really all of Missouri, refinance their underwater mortgages. 


Harp was started in April of 2009, also known as the Home Affordable Refinance Program HARP is designed to allow responsible homeowners to take advantage of lower mortgage rates and payments, even if you owe as much or more on your home than it’s currently worth.

  HARP 2.0 is also known as DU Refi Plus, Open Access, the Obama Refinance Program, Making Home Affordable, The Obama Refi, A Better Bargain for U. S. Homeowners, and Relief Refinance.  

Key HARP Refinance Benefits:

  • Unlimited Loan-to-Value: this allows you no matter how underwater to refinance to a lower mortgage payment.
  • Lower Banking Fees and Interest Rates: homeowners can shop around for the best deal as opposed to being stuck with the bank/servicer that they are currently making their mortgage payments to.
  • Not Limited to Occupancy Type: Owner Occupied, Second Home, or Investment Property all can refinance with this program.
  • Less 'Red Tape': removing many of the red tape barriers of previous governmental refinance programs the HARP refinance is easy and fast.  

Basic HARP Qualification Requirements  

  • Current mortgage must be owned by Freddie Mac or Fannie Mae
  • Current Mortgage must have CLOSED on or before MAY 31, 2009
  • No late mortgage payments made in the most recent 12 months 

There are still many homes that are underwater with the value of their home currently being less than what they owe on their mortgage. Plus, they are paying higher interest rates than what's available today. Most would like to take avantage of the lower interest rate but simply cannot. A HARP refinance is helping many borrowers who owe more than what their home is worth.  

I am a Mortgage Loan Officer with USA Mortgage and I can help you if you are underwater and your interest rate is too high. I would welcome the opportunity to speak with you about your situation and how it can best be remedied. 

Want to Know More About HARP Refinance Program?

Before you call me or any lender I encourage you to learn as much as you can about the HARP 2.0 Refinance Program. Please visit my website as part of your process about learning more about this great loan program. Follow the link below to learn more, there I have a large section devoted to frequently asked questions. If you don't find it there please call me. Learn More about the HARP Refinance Prgram

Posted in:General
Posted by Bob Rutledge on November 4th, 2013 12:31 PM
Are considering buying a home in the St. Louis area? St. Charles? Have you been turned down for a mortgage because your credit scores were too low? Are you concerned about your credit so you won't consider buying a new home?


What is a bad credit score for a new mortgage? The chart tells us that the average credit score is 678, so anything less would be considered below average. Most lenders in and around St. Louis are using a 640 credit score as the line to determine a poor credit score.

FHA mortgages is the preferred mortgage program for home buyers who are looking for a bit of leniency when it comes to buying their next new home.

FHA Provides:

  • Easier Credit Qualification
  • Reduced Down Payment
  • Great Interest Rates

So why is it so difficult to get a loan if you don't have a 640 or higher credit scores when FHA guidelines call for a 580 or higher credit score. The answer is; lender overlays a condition that the lender places on you the borrower to reduced presumed risk of application.

That has changed as we have gone back to being able to provide FHA loans to borrowers with a 580 or higher credit score!

Your credit had stopped you before in becoming a new home owner but now it can be the starting point to your next new home. If I can get you approved via an Automated Underwriting System you are nearly home.

It may be necessary to have you supply your application with an FHA approved compensating factor. There are 10 FHA compensating factors here are a few:

  • 2 months or more reserves
  • A minimal increase in housing expense or decrease
  • Larger down payment

I can help you quickly determine if your new home is right around the corner. Want to see if you qualify for an FHA mortgage today, give me a call or click the link below to find out more information:

FHA and Less Than Perfect Credit Scores

Posted in:General
Posted by Bob Rutledge on October 24th, 2013 2:28 PM

As a Mortgage Loan Officer for nearly 20 years, I have always considered First Time Home Buyers my number one niche. Mostly, I work with home buyers in the St. Louis, St. Charles, Lincoln, Jefferson Counties area but have helped many home buyers all throughout the State of Missouri.

My experience with First Time Home Buyers has shown that there are two items that most first timers are concerned with, getting approved and money.

Getting approved for a mortgage today initially starts with your credit and especially your credit scores. Since 2008 credit scores have become vital to the process of getting approved. Every mortgage program is different than the other and each lender can be different than the next when it comes to minimum needed credit score. A good estimate is that all borrowers on an application will need a minimum middle credit score of 620 or higher for most mortgage programs.


FHA: I start with this mortgage program because it has become the most widely used program for First Time Home Buyers. FHA has a low down payment requirement of 3.5%, very good interest rates, and the easiest of qualification guidelines.

VA: This mortgage program is for qualified Veterans that have served within the Armed Forces. 100% financing, no down payment, low interest rates, no mortgage insurance, and closing cost restrictions that benefit the borrower. Must have a Certificate of Eligibility and a DD214.

USDA Rural Development: Very similar to VA, 100% financing, low interest rates and no mortgage insurance. This program has income limitations being geared to low to moderate income families. There are also geographical restrictions, this is not a program for urban home buyers and not all suburban areas. A link is provided to check addresses at my USDA web page for geographical eligibility.

Conventional: Everyone seems to think that conventional mortgages require a 20% down payment, this is not true. Generally, the minimum is 5% down payment but I now have a conventional mortgage with a minimum 3% down payment. Conventional is harder to qualify for, requiring higher credit scores and tighter guidelines. The optimal borrower should have higher than average credit scores and larger down payment to get the best interest rates.

FHA 203k Renovation Mortgage: with the available housing market being very limited today the FHA 203k Renovation program has become very popular. This is an FHA mortgage that provides the funds to purchase plus rehab, renovate, fix up, modernize, or update the home you want to buy. Low 3.5% down payment, easy qualification guidelines, decent interest rates.

Down Payment Assistance and Grants

Since there are no first time home buyer mortgage programs what is available to help first time home buyers? Down Payment Assistance programs that work hand in hand with the mortgage program you are approved for.

MHDC: This is a down payment assistance program available to all qualified first time home buyers in the State of Missouri. There are two different MHDC programs but the most popular is the Cash Assistance Loan, CAL, which provides funds for down payment help. There is a non-CAL program that sometimes has a lower interest rate than the market rate, but rarely.

MHDC is designed for low to moderate income households, every county has their own income limits determined by the medium income of the area and the household size. The Cash Assistance Loan is a 5 year forgivable second mortgage that provides 3% for down payment assistance.

Ask your lender if they are an approved MHDC lender as not all lenders in the State of Missouri provides this down payment assistance program.

LOCAL GRANTS: Since I work mainly in the St. Louis and St. Charles area I am only aware of other down payment assistance program in the area but I know of a few others in KCMO and Columbia.

There are down payment assistance programs available throughout the entire St. Louis County with Florissant having their own program. Jefferson County and St. Charles County has their own program as well. As does many cities located within St. Charles County, Wentzville, O'Fallon, Dardenne Prairie, St. Charles City, St. Peters, and a couple more. 

Local Grant programs are generally second mortgage and some are forgivable some are not. The amount of funds available for assistance can range from $3000 to $5000. They are all income restrictive but as a whole they have much lower income maximums than MHDC. 

Work with your lender to help determine the best down payment assistance program for you.

Closing Cost Assistance

Did you know that with many mortgage programs the seller of the house you are purchasing can provide a seller concession that can be used to pay for some to all of your closing costs? Seller concessions can range from a maximum of 3% to 6% of the sales price.

Did you know that many lenders (not all) can provide a credit at closing to help pay for closing costs too?

Little to Zero Out of Pocket

If you can qualify for a mortgage AND down payment assistance plus get help with closing costs from your seller or lender it can be very possible to purchase a new home as a first time home buyer with very little to zero out of pocket expense.

This is the type of first time home buyer mortgage programs that many are looking for but end up with something completely different because they did not work with the right mortgage loan officer. Call me and allow me to show you how this can be done for you too.


Posted in:General
Posted by Bob Rutledge on June 15th, 2013 3:52 PM

Yes, it is possible, regardless of your experiences in the past or what you have heard it is possible to close an FHA 203k Renovation Home Loan in 45 days, maybe less.

If you are a home buyer reading blogs, forums, posts, articles, etc., about the FHA 203k renovation mortgages or if you are a Real Estate Agent that has professional experience with other 203k transactions it might seem impossible to close quickly but let me tell you that it is possible and even very likely if you have an experienced FHA 203k renovation team surrounding you.

I hear it all the time, mostly from real estate agents and other loan officers, how hard these loans are and how much time they take, then I ask two very simple questions - 'how experienced was your FHA 203k Renovation Team?' and 'where did you learn all of this?'. The answer always seems to be I don't know and/or the internet.

If you don't know the experience level of your FHA 203k Renovation Team you are only asking for trouble, delays and the risk of the loan never closing period. And just because you found it on the internet doesn't make it true.

The FHA 203k inherently has more paperwork and extra people involved, the extra paperwork and the extra people involved is a recipe that have a terrible outcome leaving a terrible taste in the mouth of someone who has gone through an FHA 203k nightmare. I am here to tell you the risk is well worth the reward. There isn't a better way to buy a home than having the opportunity to get your bathroom, kitchen, or basement redone. How about a new roof, windows, HVAC, addition, expansion, deck, appliances, or just about whatever else you can consider. All of these items can be financed and so much more.

The FHA 203k rehab/renovation mortgage can be done and without much difference than any other mortgage program, including the time to close the key to making it all happen is EXPERIENCE!

To have a successful closing in 45 days or less you need to have 3 experienced components working for you:

  1. LENDER: I am a bit biased, being a Certified FHA 203k Lending Specialist, but I feel that the most important experienced component to having your FHA 203k loan close as quickly as possible all rests with your mortgage loan officer and the lender they work for. If your lender/loan officer doesn't have the experience you will be doomed from the start. Ask your lender/loan officer how many 203k they have closed in the last 12 months, can they do both FHA 203k loan programs, is the processing, underwriting, and draw requests handled in-house? Do they have Contractors they can refer? What hard copy information can they provide, do they have 203k websites, blogs, or articles that proves their experience. Too many lenders/loan officers will 'try' to do a renovation home loan because it was presented to them, this is trouble waiting to happen. Too many only have the Streamline 203k available which is a huge disservice to you. Ask your lender/loan officer if they can do any of the other renovation programs, if they can't or don't know about the other renovation programs there is a good chance they are not experienced enough to be an asset to you.
  2. HUD Consultant: the consultant is a major component of a successful and quick closing FHA 203k mortgage application as they will interact not just with you the home buyer but will be your liaison between you and the contractor, the contractor and the lender and acts in your best interest. To find a HUD Consultant you can go to the HUD website and choose from the many in our state and area. I don't suggest this as I have found in my 15 years of doing FHA 203k loans that the HUD Consultant can make or break your success and there are wide differences in HUD Consultant just as there are with Lenders/Loan Officers. Allow your EXPERIENCED lender/Loan Officer help you choose the perfect HUD Consultant.
  3. General Contractor: HUD/FHA does not have a list of 203k Contractors as there is no OFFICIAL CERTIFICATION for 203k contractors. If there are going to be delays in closing a FHA 203k home loan, even with an experienced Lender/Loan Officer and HUD Consultant, I tell you now it will be because of the Contractor. The contractor in charge of the FHA 203k project will go through a lender vetting process and must be able to prove they have the ability and means to complete your work, plus they will have to have specific licensing and insurances. It is best to have a contractor that has experience with the FHA 203k loan program, but if you have an experienced Lender/ Loan Officer AND an experienced HUD Consultant you may be able to get away with a contractor with no to limited experience. Professional, I have been closing 203k loans since 1998 and I have many contractors that I have worked with multiple times. A good experienced Lender/Loan Officer should be able to refer several contractors to you that are already vetted, have experience with the program, and know the HUD Consultant that is working for you.

If you are interested in taking advantage of the FHA 203k Renovation Mortgage Program or you are a real estate professional with clients who need this home loan do not be deterred by what you read on the internet or hear from others or you will miss out on a  great opportunity. Just remember EXPERIENCE is the key to successfully closing your FHA 203k home loan in 45 days!

Posted in:General
Posted by Bob Rutledge on May 18th, 2013 8:09 PM

A Recent study released by HUD regarding the FHA 203k Renovation Mortgage Program stated that after all work was completed homes that utilized the FHA 203k home loan had over 22% equity in the home.

Imagine what that can mean to a new home buyer who has bought a fixer upper with a 3.5% down payment or the home owner that is wanting to sell their home in the near future but has little to no equity in their home to realize that needed profit.

Buying that new 'bargain' home that is priced to the buyer with instant equity is a near impossible task without planning. Planning home improvements that pay you back requires strategic consideration. There are several home improvements that will provide you with the home that you want and pay you back when the time comes.

Additions: nothing adds value more than a room addition, adding a garage, or a second floor. If additions are done wisely they are the most valuable home improvement when it comes to adding value to your home. Add a second story, expand into a master suite, a new or enlarged garage, create an extra bathroom, or give yourself an extra bedroom.

Kitchen: The kitchen is usually the focal point of most homes and is a major selling point. The appearance and layout of a kitchen can often be a deal breaker in a sale and can greatly increase the value of a fixer upper. Improving a kitchen doesn't have to be a huge investment, just replacing counter tops, key appliances, or cabinet hardware can transform the look and feel.

Basement: Make the most of this bonus space by finishing it for use as a quasi apartment, office, entertainment area, additional living space or combinations of all. A finished basement has appeal to multi-generational households.

Bathroom: Along with kitchens, bathrooms tend to age or become dated quite easily. Neutralize potential design flaws or modernize by replacing the vanity, installing efficient fixtures, and choosing hardware that facilitates easy access for all.

Siding: A tight, tidy home contributes to that initial curb appeal and adds value plus takes major home improvement worries off your hands and that of any future home buyer. New siding will add to the efficiency of your home, update, and add value. Spruce up your home's exterior by installing new siding or by replacing or repairing siding for an eye-catching protective finish.

Decks and Patios: Building a deck or patio is one of the least expensive ways to extend your living space and add value. Composite decking is a great low maintenance option, and even building a deck from pressure-treated wood can bring a high return on investment.

Windows: Installing replacement windows is a home improvement that pays everyone. The home buyer and/or home seller could possibly earn valuable tax credits and the home owner will enjoy lower energy bills. Especially in older homes new windows will increase the value of a home and have the beauty and charm that all home owners desire.

Other great improvements that will add value to your home, new and updated flooring, appliances, front entry doors, utilization of attic and/or dormer space, roofing, and HVAC updates.

Financing the cost of your home improvements especially when you are buying a new home can be challenging. The FHA 203k Renovation mortgage program was designed to help new home buyers finance the cost of purchasing their new home plus adding in to the new mortgage the cost or repairing and renovating the new home.

When you already own you home the cost of repairs and renovation can be costly, and near impossible if you do not have a lot of equity in your home. The FHA 203k program can help solve that problem by refinancing your current mortgage to a low interest rate plus rolling in the cost of the renovation and repairs.

If you are utilizing the FHA 203k loan to prepare for selling your home then you win on all fronts. You have increased the value of your home, rolled the cost into a very low interest rate mortgage, that will get paid off when you sell the home. If you have done your work wisely not only will the buyer of your home helped to off set the costs you will have realized a gain after the sale that was not there when you started.

I am a FHA 203k Renovation Mortgage Specialist, I help home buyers and home owners every day realize their home dreams. If you are looking for other renovation mortgage programs like the Home Style or Home Path Renovation home loan I can help you with that too. Please, if you have any questions or would like to start the mortgage process feel free to contact me.

Posted in:General
Posted by Bob Rutledge on May 12th, 2013 12:02 PM

'What mortgage programs are available for first time home buyers?', I haveFirst TIme Home Buyer Home Loan been a mortgage lender for going on 20 years and I seem to be asked that question nearly every day.

That question has meant many different things to the person who was asking, they were looking for easier qualification, less down payment requirement, no down payment, down payment assistance, lower credit scores and so many other things.

In my 20 years as a mortgage loan officer there has never been a mortgage program specifically for first time home buyers, at least not a mortgage program that has different qualification guidelines for first time home buyers and not everyone else. That is not to say there are mortgages that are better suited for first time home buyers. 

FHA has always been referred to as the First Time Home Buyers home loan, it was not designed to be specific to them but the loan suits the needs of many who are purchasing their first home.

  • Lower Credit Score
  • Lower Minimum Down Payment
  • Higher Debt to Income Ratio
  • Non-Occupant Co-Borrowers allowed

Where the confusion, I feel, comes in is with Down Payment Assistance Programs such as MHDC or the local grant programs offered in many of the areas. These down payment assistance programs are only for first time home buyers.

The #1 Best First Time Home Buyer Mortgage

I inform all my first time home buyers about all the loan programs available to them and allow them to make their choices but the one more program that provides the most upside to all first time home buyers is the FHA 203k Renovation Mortgage.

This mortgage program has all the benefits of a regular FHA home loan, low interest rates, easier qualification, lower credit scores, higher debt to income ratio, and it allows for co-signers. But, the added attraction to this loan program is that it allows the borrower to add into the loan amount the cost of renovating their new home.

Today's housing market is not rich in perfect move in ready homes for first time home buyers. In today's housing market as less and less homes come onto the market the perfect homes will have more competition and higher asking prices possibly bidding wars. Many of the perfect homes that are move in ready are really near perfect and actually could use a little extra work to meet the wish list of the new home buyer.

The FHA 203k Renovation Home Loan fixes all these home problems and allows a first time home buyer to explore every home on the market. Imagine finding a foreclosure, distress home, short sale, or a home that isn't perfect, more than likely this home is priced well below the market value. It's a deal! Plus, it has the size, looks, number of rooms, the school district, neighborhood, and garage that you want but it needs work.

The sink is missing, the carpeting is a green shag, there is very ugly wallpaper throughout the house, needs new windows, you would like new appliances, a modern kitchen, and a finished basement. The FHA 203k makes all this possible and much more.

Why go home shopping without being pre-approved for an FHA 203k Renovation loan? Sure, you may end up finding that perfect home and not needing the FHA 203k but you will find your next new home faster when you have the ability to see all the homes on the market.

Interesting fact, HUD came out with a study that stated that after all work is completed on homes with FHA 203k financing that the average retained equity in the home is 22% after only a 3.5% down payment.

Ask yourself this question as a first time home buyer, If I could buy the not so perfect home but end up with the perfect home in 3 to 5 months plus turn my 3.5% down payment into much more equity in that same time shouldn't I keep all my options open?

I am a Certified FHA 203k Specialist and I would like to help you get that perfect first home. I work with first time home buyers every day with all loan programs and down payment assistance program. Allow me to do the same for you.

FHA 203k Renovation Mortgage


Posted in:General
Posted by Bob Rutledge on May 8th, 2013 2:00 PM


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