ConvertingDistressed Properties

into Eco-Efficient Homes

Rick WilliamsCertified Green Building Professional

(831) 247 5573

Stormy Weather in Real Estate

48% of Listings are Distressed Properties

Buyers want the best deals!

Next Wave of Foreclosures

� Foreclosure Moratorium to end

� Six million homes in shadow inventory

� Option Arms & Alt A due to reset

� Banks & Brokers forced to buy back defaulted loans

� Conventional credit is tough

Storm of Opportunities

203K Renovation Loan

• $35,000 renovation funding included in first mortgage

AND

PG&E rebates

$1,500 to $4,000

AND

CAR’s R.E.A.P $250 credit towards energy audit

Profit Opportunities

� Purchase distressed properties

– 3.5% down' 30 year financing

� gift funds OK

� Non resident borrower OK

– Assumable mortgage on resale

� Renovate & Eco Energize

� New homeowners get rebates

� Loan limits to $729,750

203K Particulars

� 203K Streamline $35K improvements– Roofs, kitchen, bath, flooring

– HVAC, Insulation, PV, windows >> rebates

– No structural changes or additions

� 203K Standard No limit– Need consultant for additions & foundation work

� 203K Investor due in May (15% down)

– $5000 minimum for energy efficiency

� Can combine with EEM

Refinance Opportunity

� Refinance low equity homes

– 2.5% equity only

– Higher ratios allowed

– Non resident Co-Borrower

– Today’s low rates assumable

� Create comfortable homes

� Increase value

� Renewables →→→→ Near net zero

Eligible Properties

� Single Family detached

� Condos - Internal only

� 1 to 4 units. Owner Occ

� Mixed use Res/commer

� HUD REO

� Must have final permit for 1 year

� Redtag conversions OK

Potential 203K Buyers

� First Time Buyers

� Move up & move down

� Changing needs

� Occupant investors

� Discount shoppers

� All Prequalified

203K System: Steps Prior to Offer

� Buyers Preapproval

� Preliminary inspection

� Guesstimate budget

� Renovation Value Analysis

– Value “As Is”

– Renovation cost Guesstimate

– Final Value with Comps

� Present Offer with 203K– 25 day contingency & 60 day close

203K System: Steps to Submission

� FHA Home Inspection

� HERS Energy Audit ($250 credit from CAR)

� Scope of work: – Must do, Should do, Like to do

� Choose contractors

� Detailed contractor bids

� FHA appraisal (As Is & Finished Value)– Can loan to 110% of finished value

203K System: Steps to Closing

� Complete loan submission

� Conditional Approval

� Approval & Docs > COE

� Work completed within 6 months

� Contractors paid from escrow

� PG & E pays rebate to homeowners

Eligible Improvements

� Repair/Replacement of roofs, gutters

� Repair/Replacement/upgrade of existing HVAC systems

� Repair/Replacement/upgrade of plumbing & electrical systems

� Repair/Replacement of flooring

� Minor remodeling, such as kitchens & baths

� Painting, both exterior and interior

� Weatherization, including storm windows and doors, insulation

� EnergyStar appliances, stoves, ranges, refrigerators, washers /dryers, dishwashers & microwave ovens

� Septic & termite

� Disability Accessibility

� Connection to public water or sewage system

Green Updates

Needed Repairs

� Repair/replace/add exterior

decks, patios, porches,

sidewalks, driveways

� Basement finishing and remodeling,

� Basement waterproofing,

including mold removal

� Window and door

replacements and exterior wall

re-siding

Let’s Do It !!

� Build Contractor teams

� Educate buyers

� Show it on listings

Rick Williams

831 247 5573

rick@ ecoenergyloan.com