Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) loans are popular homebuyer choices, but are also available if you're refinancing your mortgage. These loans must meet certain requirements.

FHA Loan	VA Loan
Streamlined refinances  Available for a variety of loan terms  Typically requires mortgage insurance	Streamlined refinances  Financing for eligible service members  One-time VA funding fee typically required
Features Available in a variety of fixed-rate and adjustable-rate loan options.  May allow you to use a gift or grant for all or a portion of your closing costs.  Current FHA homeowners may be able to obtain an FHA streamline refinance.  You typically have to pay upfront and monthly FHA Mortgage Insurance premium.	Features Provides financing for qualified veterans, reservists, active duty personnel, or eligible family members.  Available in a variety of fixed-rate and adjustable-rate loan options.  Allows closing costs to come from a gift or grant. Gives current VA homeowners the possibility of getting a VA-to-VA refinance.
Benefits Requires less cash upfront for your down payment and closing costs.  Available for all income levels.  Allows a new buyer to take over the loan if you sell your home (subject to loan approval).  Provides reduced paperwork if you're eligible for an FHA Streamline Refinance.  A co-applicant can help you qualify even though they do not live in the home.	Benefits Provides a wide range of rate, term and cost options.  Doesn't require monthly mortgage insurance.  Provides reduced paperwork if you're eligible for a VA-to-VA Interest Rate Reduction Refinance Loan (IRRRL).
Considerations Be certain to ask your home mortgage consultant to help you compare the overall costs of all products, including the monthly and long-term costs and conditions of the required mortgage insurance. You can typically only have one FHA mortgage at any given time.  In many instances, you may find FHA to be a more expensive financing option and should be considered after thoroughly evaluating all other product options that meet your credit qualifying and financial needs.	Considerations You typically pay a one-time VA Funding Fee that can be financed into the loan amount.  You can get financing for your primary residence only.

FHA Streamline

Refinancing into a lower monthly mortgage may help homeowners.

• Reduce an existing overall mortgage payment
• Reduce an existing mortgage interest rate
• Build home equity faster.

Refinance with confidence.

• Lender-paid closing costs – No out-of-pocket closing costs for borrowers
• No appraisal required – Use of original appraised value may help minimize declining value issues
• No maximum income ratios – Changes in income may have less impact
• Quicker financing process – Reduced documentation helps facilitate faster loan closing
• Potential refund of existing FHA upfront MIP

FHA 203(k) Rehab Loan

The FHA 203(k) Rehab Loan is a popular mortgage program designed for buyers that want to finance the cost of home improvements into a new loan.

The Federal Housing Administration (FHA), which is part of the Department of Housing and Urban Development (HUD), offers this loan program to provide for the rehabilitation and repair of single family properties. One single loan is used to pay for the purchase (or refinance) and the cost of rehabilitation or updating of the home. Those properties include town homes and single family homes. This loan is only available for homebuyers purchasing a primary residence that they will occupy. Unfortunately, it is not a program for investors to purchase a home – fix it up – and then sell.

Unfortunately, most mortgage loan programs require homes “in need of work” to be completed before the financing can be secured for the purchase transaction. Whether the property needs a little or a lot of work, most First-Time Home Buyers simply don’t have the up-front cash to invest in a property prior to actually securing the financing.

Advantages of 203k Rehab Loans:

Savings –

Repairs on a fixer-upper can be expensive, and the 203k Rehab Loan allows borrowers to finance the improvements into the new loan vs having to pay for the upgrades prior to closing.

The financing for this loan will include the purchase price, as well as the improvements you are either required to do to be able to live in the home, or that you want to do, such as upgrade the kitchen, bathroom, etc.

Low Interest Rates:

Historically, FHA Mortgage Loans have lower than average rates when compared to commercial or conventional financing programs.

Great Property Deals:

Since Rehab Loans are designed for “fixer-uppers,” buyers can qualify for a loan on a home that needs work, and actually finance the construction costs / repairs up front.

Low Down Payments

Another great thing about the FHA 203(k) Rehabilitation program is that it is originated and underwritten just like a standard FHA loan program. So you can purchase the home with the same 3.5% down payment of a regular FHA loan, depending on your loan amount. In some high cost areas the down payment may be 5%, but there is no larger down payment required on a 203(k) than there is on the regular FHA loan program. And the seller can also still assist you with your closing cost as wel, just like with a regular FHA loan.

203(k) Rehab Loans Eligible Property Types

The property has to have been completed for at least one year, and it has to be a one- to four- family dwelling. You can use the program to convert a one family dwelling to a two-, three-, or a maximum of four family dwelling.

Eligible property types are:

• single family detached homes,
• single family attached (like row houses) town homes.

* Cooperatives (Co-ops) are not allowed.

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Two Types of FHA 203(k) Loans:

The Streamlined K is used when you want to make minor cosmetic changes to a house and the total rehab cost can not exceed $35,000.

A Standard FHA 203(k) loan allows you to make substantial structural improvements, repairs, remodeling and updating to a house…even build a new one.

Streamlined 203(k):
A Streamlined 203(k) allows minimum or limited repairs to be done…basically “cosmetic” repairs, improvements or updates. It also eliminates most of the paperwork required of a full 203(k) and simplifies the process to obtain rehab funds.

• Under the Streamlined program, there is a minimum of $5,000 and a maximum of $35,000 to be financed in the mortgage amount to improve or upgrade the home.
• No “structural repairs” are allowed under a Streamlined K, however, making or correcting any structural items is not considered to be minor.
• The minimum of $5,000 of required and substantial improvements that will increase the marketability and value of the home must first be included. Any repairs and improvements must comply with HUD’s Minimum Property Standards and must meet all local building, zoning and other codes.
• Minimum required repairs include any health and safety repairs like peeling lead paint or replacing missing railings. Whether you want those items included or not, all health and safety issues must be addressed first. Smoke detectors must also be added if missing.

Eligible Improvements for a Streamlined 203(k): Repair, Replace or Upgrade Roof, gutters, downspouts Existing HVAC systems Plumbing and electrical systems Flooring Painting Appliances Weatherization Repair, replace or add exterior decks, patios, porches Basement waterproofing Window and door replacement and exterior siding Septic and/or well repair or replacement Improvements for accessibility Lead-based paint stabilization or abatement of lead-based paint hazards

Ineligible improvements under the Streamlined 203(k): Major structural repairs New construction (adding a room) Repair of structural damage Repairs requiring detailed plans and specs Any repair taking more than 6 months to complete Repairs that would necessitate more than 2 draws Luxury items that are not a permanent part of the real estate Granite, marble countertops, jacuzzi tubs, hot tubs, pools, etc

Standard FHA 203(k):
If you have a larger project that needs a full gut job or additional rooms, the Standard FHA 203(k) is the right program. This is what we refer to as the “full blown K”.

Under this section of the program, much more extensive repairs or remodeling can be accomplished.

• The full K allows you to make “structural” changes to enlarge a house, build a new home on an existing foundation and even take an existing house and move it.
• Unlike the Streamlined K, where the improvements are “cosmetic”, under the full blown K the repairs or improvements can be and usually are “substantial”.

So, you can imagine that the process is a bit more involved.

Think of it as a mini-construction loan program; where your contractor can ask for as many as 5 draws, and each draw request will need to have an inspector come out to make sure the work has been completed for that draw request prior to any monies being paid.

Because it is more involved than a standard loan, there are more costs involved.

Type of work for a Standard 203(k):

Structural alterations and additions Garage Attached unit (new) Remodeled kitchen and baths Changes to eliminate obsolescence and reduce maintenance Modernize plumbing, heating, A/C and electrical systems Install or repair well or septic systems Roofing, gutters, downspouts

Flooring, tiling and carpeting Energy conservation improvements Major landscaping Improvements for accessibility New non-attached appliances Interior and exterior Swimming Pool repairs Other improvements that are a PERMANENT part of the real estate *Luxury items are not permitted to be included in the financing

These are both great loans to use to find that “almost perfect” home and truly make it into your Dream Home.

Not all lenders are able to do this type of loan, as you can see, they require a bit more attention once the loan has closed. Our loan origination and servicing staff is well-versed on the aspects and process of the FHA 203(k) Rehab Loans - get started today.

VA Home Loans

As a servicemember or veteran of the United States military, your duty has been to support and defend our country.  The Arkell Barnes Mortgage Team proudly salutes your commitment, and we stand ready to help you reach your home financing goals with a VA Home Loan.

With many veterans returning home and in need of housing within the communities we serve, we would like to extend not only the advantages of a VA home loan, but also additional incentives to help lower the cost of purchasing a home:

Features of a VA Home Loan:

• No down payment if the purchase price does not exceed the appraised value of the home
• No monthly mortgage insurance requirement¹
• No prepayment penalty for loans paid off early
• Closing costs are limited by the VA and may be paid by the seller

Incentive Offers available through December 31, 2017! Incentive offers may include*:

• No loan origination fee (up to $1,085 value) through the Arkell Barnes Mortgage Team
• $200 off settlement fees through an participating settlement services company
  
• Complimentary appraisal (up to $525 value)²
• 10% discount off home inspection fee through US Inspect (purchase only)³

*Not all incentive offers are available in all areas. All Incentive offers valid on complete VA home loan applications received between 09/30/2017 and 12/31/2017. Loan must close within 90 days from the date of loan application. Only one discount permitted per New Loan. Contact local Mortgage Consultant for details.

The Arkell Home Mortgage Team is not affiliated with any government agencies.

THE USDA Guaranteed Rural Housing Loan Program

Guranteed Rural Housing Loan Program's mission is to assist low-to-moderate income, rural home buyers achieve thier dream of homeownership.

The Arkell Barnes Mortgage Team and the USDA Rural Development have partnered to extend 100% financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. As an approved lender, the Arkell Barnes Mortgage Team offers this financing option and can help applicants purchase a home with affordable interest rates and loan terms.⁴

Features include:

Budget-friendly benefits — No minimum down payment or cash reserve requirements; closing costs and fees may be financed as part of the loan amount up to 100% of the appraised value.⁵
Contributions allowed — Interested party contributions up to 6%; gifts and grants are permitted.
Built-in resale advantage — Loans are assumable, with Rural Development (RD) approval, giving
qualified future buyers an option to take over your existing interest.

For more information contact us by phone at (919) 539-9800 or by email at dabarnes@mortgages.mybrb.com

No or low down payment options may not be the best product for all borrowers. Please consult your mortgage consultant to discuss your financing options.

1. Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee. The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether a down payment is made. The VA funding fee may be financed or paid in cash at the time of closing.

2. Borrowers are eligible for a lender credit toward closing costs on the Closing Disclosure on a new purchase, secured by a first mortgage or deed of trust (New Loan), subject to qualification, approval and closing with The Arkell Home Mortgage Team. Loan must close within 90 days from the date of loan application. Discount may not exceed $525 for appraisal. Credit coupon must be presented at time of application and all eligibility requirements met no later than 2 days prior to the New Loan closing date. This discount is void where prohibited and is non-transferable, subject to the terms herein, and valid on all complete applications received on or before 12/31/2017.

3. Home inspection services provided by US Inspect include a 10% discount and a 90-day home inspection guarantee to all Veteran borrowers obtaining VA loan financing with The Arkell Home Mortgage Team. The home inspection guarantee covers items that were inspected by US Inspect and found to be operating properly at time of inspection. For limitation and exclusions, please see 90 day guarantee terms and conditions.

4. Eligible only for single family, primary residences purchased within the eligible rural areas as defined by the USDA. Credit is subject to approval. Property location, asset and income restrictions apply, and home buyer education may be required.

5. A guarantee fee is charged and collected at the time of closing and can be paid by the buyer or seller, or financed. Loan amounts may exceed the appraised value of the property (e.g. >100% LTV) to include the amount of a financed guarantee fee. This applies only to loans for which all or a portion of the guarantee fee is being financed into the loan. Information is accurate as of date of printing and subject to change without notice.