Lunch & Learn: Are appraisals the next big opportunity in mortgage fulfillment?

This Lunch & Learn for mortgage lenders will explore the evolution of the appraisal process as well as opportunities for innovation.

Rohit Chopra pleads the fifth on QM rule

Consumer Financial Protection Bureau Director Rohit Chopra, in his first report to Congress, answered for decisions made by his predecessor, and provided some indication of his priorities going forward.

How to simplify the appraisal process for everyone in today’s hot market

While the world might be slowly getting back to normal, the housing boom is far from over. Appraisers need to make sure they have the right tools to manage the high demand.

Which core segments of brokerage make the most money

Today’s HousingWire Daily is a RealTrending crossover episode. It features Tracey Velt, editorial director at HW Media Company RealTrends, who interviews Chris Kelly and Christian Wallace.

MortgageReal Estate

Finance of America now offers renovation loans

"Benji" portal helps clients get approved

Lending and services platform Finance of America Inc. announced today the launch of Finance of America Home Improvement, a new business division offering non-mortgage financing options, including renovation loans.

Finance of America’s new division offers the “Benji” portal, which gives contractors tools to expand their business. Homeowners can also use it to access financing solutions through their contractor.

The Benji portal is also available to contractors to manage their projects and deal pipeline, access financing calculators, and get their clients approved for financing, said Shawn Stone, Finance of America Home Improvement president.

“The high demand for housing combined with persistently low inventory has created an environment where home renovations are more prevalent and homeowners are searching for new ways to pay for these projects,” Stone said. “This product provides an entry point for contractors to introduce homeowners to lending solutions for their projects. Meanwhile, we make it easier to secure quick financing approvals so the contractor or vendor gets the customer approved, the deal closed, and they can move on to the next project.”

Per a study from Harvard University’s Joint Center for Housing Studies, renovation financing is expected to increase 3.3% in 2021 to $433 billion.

Why Traditional Loan Sales are Holding You Back

In this webinar, MCT COO Phil Rasori and expert guest panelists will review how mortgage lenders can overcome common challenges selling their loans on the secondary market. Join us to learn how they are using new strategies to bypass these frustrations, ultimately leading to a pickup in loan sale profitability.

Presented by: MCT

Homeowners in 2020 turned to renovation loans roughly as much as they did in 2019, originating $51.7 billion in renovation loans — compared to $51.6 billion in 2019. Those figures do not count the homeowners who refinanced in order to fund renovations, or the ones who put the new home office addition on a credit card.

Two primary programs are used to finance a home renovation: the 203K, which is administered by the FHA and covers the cost of the home plus the cost of the repair, and requires between 10% and 20% of the total loan amount be set aside as a contingency. The 203K also requires a HUD inspector and consultant and can’t be used for “luxury” items such as pools.

The other program, the Fannie Mae Homestyle program, for conventional borrowers, requires that repairs be completed within 12 months and requires a contingency be set aside for cost overruns. However, it doesn’t require a HUD inspector or consultant — it similarly requires the borrower to pay closing costs and origination fees.

Both programs offer financing based on the “as completed,” or future value of the property, based on an appraisal which takes into consideration the planned additions. The Homestyle program can be used for investment properties, though the 203K loan is only for primary residences.

Leave a comment

Most Popular Articles

Why brokerages and mortgage lenders are rushing into JVs

Joint ventures are suddenly stitched into the fabric of a handful of national brokerages. But the idea of the joint venture collides with the loose, informal networks that color the American housing economy. HW+ Premium Content

Oct 25, 2021 By and
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please