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The 203k Rehab Loan

Picture the Potential

A MARK E T I N G P A CKAG E & LOAN

P ROG RAM D E S I G N E D T O IN C R E A S E

S A L E S AND R E DU CE T IM E ON MARK E T

AfterAfterAfter

1 South Nevada Avenue, Colorado Springs, CO 80903

CentralBancorp.com

BeforeBeforeBefore

The 203k Loan Picture the Potential Marketing Package

CB Title and CB&T Mortgage combine their expertise to offer you

a rehabilitation loan and marketing package to help you turn your

listings faster.

With an investment of $100 you will receive the following:

• 100 customized listing flyers that include the benefits associ-

ated with the 203k loan. (Template enclosed)

• A link to your listing in the Real Estate Toolbox, an e-

newsletter that reaches over 900 people

• Listing on “Bringing dreams to life with the 203k” LinkedIn

page

• Listing on a 203k Loan Candidate flyer distributed to over 200

real estate professionals monthly (Template enclosed)

• Consultation with Bev and Jill to maximize selling points of

your listing Meet your Marketing Team

After

Before

Jill Webb, CB Title • 14 years of sales and marketing background • Colorado Springs native • Known for bringing ideas to life • Genuine interest in community reinvestment and

creating a beautiful place to live • Actively involved in community and housing indus-

try

Bev Creswell, CB&T Mortgage • 20 plus years of experience specializing in 203k

loans • Sole lender in Colorado Springs certified to teach

203k lending • Has completed over 200 203k loans since 1989 • One of the original lenders for the FHA 203k pilot

program

(719) 684-6547

(719) 228-1082

Renderings provided by Stauffer and Sons Construction, an approved FHA contractor www.StaufferandSonsConstruction.com CentralBancorp.com

This program brought to you by CB Title and CB&T Mortgage , affiliates of Central Bancorp

Understanding the 203k Loan

The FHA 203k Loan

With a 203k loan a buyer can borrow the funds to purchase or refinance a home and renovate it all in one loan. The 203k program serves as the primary tool of the Federal Housing Administration (FHA) for providing insured mortgages for the purchase or refi-nance of single family properties (one to 4 units) in need of major rehabilitation. This program is tailored to buyers interested in buy-ing a house that needs work, but don’t want the hassle of getting two separate loans, or for people who need extra financing to im-prove a newly purchased home.

Advantages of the FHA 203k

• FHA certified contractor must complete renovations within six months after closing with the loan

proceeds.

• Great tool for REO properties

• Low down payment and competitve

interest rates

• One loan amount for both the purchase/

refinance and the cost of repairs

• Construction loan fees may be financed

• Mortgage is FHA insured

• Maximum loan to value is based on the cost to acquire the property plus rehab or 110% of the “as improved” value,

whichever is less.

• Can be used in conjuction with the first time home buyer $8,000 tax credit if home is purchased and loan closes on

or before Novemeber 30, 2009

A 203k Loan Includes

• Mortgage amount includes:

- The cost of rehabilitation

- a minimum of $5,000 in

eligible repairs is required

- Up to 6 mortgage payments during

completion of construction

- Upfront mortgage insurance pre-

miums

- 203k consultant fee

- Cost of inspections, title updates,

and permit fees

• Money is released to contractor in

draws as work is satisfactorily com-

pleted

• Escrow is set up for the estimated cost

of materials and labor to complete the

rehabilitation, plus 10%-20% contin-

gency reserve

-Escrow for repairs earns interest,

payable to borrower

203k Eligible Improvements

• Structural repairs and alterations—

includes finishing attics/basements and

repair of structural damage

• Improvements/modernization—includes

remodeled kitchen/baths, installation of

permanent appliances such as built-in

range/oven, range hood, dishwasher,

microwave

• Elimination of health/safety hazards—

including resolution of lead based paint

• Changes for aesthetic appeal—includes

new siding, exterior doors

• Interior and exterior painting

• Installation of well and/or septic

• Recondition or replacement of heating/

air conditioning

• Replacement of roofing, guttering and

downspouts

Benefits to the 203k Loan

Listing Agent Benefits

• Increase sales and income*

• Retain good standing with your asset management com-

pany

• Potential to significantly reduce time on market and mar-

keting costs*

• Differentiate you from competitors

• Increase exposure through Central Bancorp 203k

Picture the Potential marketing program initiatives

a. Listings on social media sites

c. Newsletter links to listing information

d. Listing flyer distribution to buyer’s agents

e. Custom “picture the potential” flyers

This program brought to you by CB Title and CB&T Mortgage , affiliates of Central Bancorp

Buyer Benefits

• Obtain one loan covering mortgage and remodeling

work at a competitive interest rate

• Renovations must be completed within 6 months of

closing. If house is uninhabitable due to renovations,

you may finance up to 6 mortgage payments.

• You direct the remodel to match your taste and

lifestyle

• Take advantage homes valued under market. Potential to

build immediate equity once the renovation is complete

• For qualifying purposes FHA will consider 90% of

rental income on duplex, triplex and fourplex units.

• Can leverage first-time home buyer $8,000 tax credit if

home is purchased on or before November 30, 2009

Seller Benefits

• Potential to significantly reduce time on market for

homes that need repair

• Provide rehabilitation options for buyers to purchase the

property, especially if it’s a property that has structural

damage

Buyer’s Agent Benefits

• Increase sales and income*

• Quicker decisions by buyers

• Gives you a financial tool to help your buyers

• Differentiate you from competitors

*Marketing strategies are not guaranteed.

CB&T Mortgage 203k Finance Example

Financing Breakdown for Property with Improvements:

Purchase Price $ 150,000

Cost of Rehab 123,677

$ 273,677

Loan Amount $ 266,632

Down Payment 9,578

Closing Costs $ 4,866.99 (includes title fees)

Prepaids 2,307.88

Total $ 7,174.87

Closing costs and prepaids may be paid by

seller not to exceed 6% of purchase price.

Principal and Interest $ 1,525.76 *

Mortgage Insurance 121.05

Taxes 150.17

Insurance 83.33

Total $ 1,880.31

*Based on an interest rate of 5.50% over 30 years. APR 6.184%.

Example based on rehabilitation of a fourplex with a projected rental

income of $1,725. Based on $575/month per unit x 3 units with pur-

chaser occupying 1 unit as primary residence.

Bev Creswell I CB&T Mortgage I License #100024383 I (719) 440-1082 I Bev.Creswell@CentralBancorp.com

FHA Loan Limits

One—Family Home $325,000

Two—Family Home $416,050

Three—Family Home $502,900

Four—Family Home $625,000

Projected Monthly Mortgage Payment

FHA down payment minimum requirement is 3.5%