LIMITED 203(k) PURCHASE TRANSACTION
MAXIMUM MORTGAGE CALCULATION
Step 1:
Establishing Financeable Repair and Improvement Costs, Fees and Reserves
$________
A.
Repair and Improvement Costs and Fees Total (Sum of A1 thru A4)
1. Costs of construction, repairs and rehabilitation
$________
2. Inspection Fees (work Performed during Rehabilitation)
$________
3. Title Update Fees
$________
4. Permit Fees
$________
B.
Financeable Contingency Reserves
$________
$________
C.
Financeable Mortgage Fees, if charged (Sum of C1 and C2)
1. Origination Fee (Greater of $350 or 1.5% of (Sum of 1A+1B)
$________
2. Discount Points (Applied to the sum of 1A+1B)
$________
Total Rehabilitation Costs, Fees, and Reserves (Sum of 1A , 1B & 1C)
$________
D.
Not to exceed $35,000
Step 2:
Establishing Value
A.
Purchase Price
$_________
B.
Inducement to Purchase
$_________
$________
C.
Purchase Price Less Inducement to Purchase
As-Is Property Value
$________
D.
(As-Is Appraisal may be required to comply with Property Flipping guidelines)
Adjusted As-Is Value
E.
$________
(If As-is appraisal is obtained, then the As-is property value (Step 2D) = Adjusted As-Is Value, OR
if As-is appraisal is not obtained, then Step 2C = Adjusted As-is Value)
$________
F.
After-Improved Value (Appraisal Subject to repairs and improvements)
Step 3:
Calculating Maximum Mortgage
A.
Step 2E + Step 1E (Adjusted As-Is Value + Step 1 Total)
$________
B.
Step 2F (After-Improved Value) X 110% (100% if Condo)
$________
C.
Lesser of 3A or 3B ($__________) x Maximum LTV Factor from 3F ______%
$________
D.
Nationwide Mortgage Limit
$________
E.
Initial Base Mortgage Amount = Lesser of 3C or 3D
$________
F.
Determining Loan-To-Value Factor for Maximum Mortgage Eligibility ______%
Basis
Criteria
Maximum LTV Factor
96.5%
MDCS
At or above 580
90%
MDCS
Between 500 and 579
85%
Secondary Residences
With HOC Approval
96.5%
No Credit Score
Manual Underwriting required
Note: MDCS = Minimum Decision Credit Score
Mortgagees must consult HUD Handbook 4000.1 for detailed guidance on all 203(k) loan transactions.
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Last Updated 04/01/16
LIMITED 203(k) PURCHASE