Full Transcript is Below:
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– Look who I have here. It’s the great Tracy Burke. She’s our construction and renovation manager and boy is business picking up. Great to have you here. How you doing?
– Thank you Greg, doing well.
– Awesome, we just came off of a great month of May, where your renovation business really spiked upwards and it was national renovation month. What did we learn this month?
– We learned a lot about, what an NFM has to offer as far as renovation products, we offer the VA renovation which is our newest, not a lot of lenders offer the VA renovation. It’s for non-comprehensive repairs up to 35,000 dollars. We also offer the Fannie Mae home style and obviously the FHA 203K. And, business has increased because spring market’s a hot market, and we’ve seen a lot of buyers taking these renovation loans because they wanna, to do a lot to the house.
– Upgrade the kitchens, the bathrooms, things like that.
– Well that’s very exciting news, and I wanna just ask a general question, if you’re a loan officer, how do you know if you’ve stumbled upon a possible renovation loan?
– Sure, Greg, I an absolutely answer that, it’s not always easy. Sometimes the borrower will tell you the house is in great condition, and what I always like to do is google the address if you have the address, google the address you might find out some things by looking at the pictures.
– Like, there might be a tarp on the room.
– Might be missing some appliances, you might see holes in the walls, things like that. And sometimes the borrower just wants to take a renovation loan to upgrade things, maybe there isn’t anything wrong with the house but that’s a good way to maybe identify that it could be a renovation loan and sometimes when you have a long conversation with the borrower about the property and what it has to offer, sometimes in that conversation it will come out that it may need a renovation loan.
– And NFM has a renovation department. What’s that look like and how does that work in the process?
– So, we’re here to help you, from beginning to end. And, we take the loan from start to finish. We’ll have a conference call with you and your customer, talk to them about the do’s and don’ts, things we should do, shouldn’t do throughout the process, and how the loan works in detail. It can be a complicated and kind of, intimidating process, we wanna make it as easy as possible for the customer.
– Yeah, complicated if the loan officer was in it and you were in it, so you take it over, you just get a name and number, the loan officer gets compensated on it, and they get out of the way and are just there as kind of someone to assist. Let me ask you a couple of real quick hitting questions, all right.
– We’re gonna go speed questions here. Fico range for a reno loan?
– 620 and above.
– Okay, that’s very good. Cash out limit? We know VA’s 35, so when I say cash out I mean, cash that you could put into the property, what about for other products?
– There really isn’t a maximum FHA, conventional does have a maximum of 75% of your acquisition cost, which is your sales price plus your renovations, it’s a weird calculation but there is a limit on conventional. But we’ve seen 200,000 dollar renovations that folks are doing, completely remodeling the house from top to bottom.
– Okay, typically how long does it take from beginning to end on a reno loan?
– Sure, I always recommend allowing 45-60 days for a closing, longer if the renovation is gonna be a higher end, more expensive renovation and it’s more comprehensive as far as doing more items.
– Okay, before we let you go, I wanna ask you how the one time Construction-to-Perm loan, that NFM offers is coming along? What do we need to know about that?
– It’s a great product, we follow the Fannie Mae guidelines. We do go up to a high balance with Fannie Mae. But we’ve had a, an increase in that program and we’ve had a lot of interest in the construction perm, so it’s exciting.
– Very good, well it’s always exciting to sit with you.
– Thank you Greg, it’s exciting to sit with you, I’m glad to be here.
– Tracy Burke, construction and renovation manager, I’m Greg Sher, so long, we’ll see you next time.