Congressman Howard Buck McKeon, R-Santa Clarita, will be in Canyon Country at 10:15 a.m. on Friday to unveil his latest piece of legislation, which is aimed at revitalizing communities and local real estate markets, said McKeon spokeswoman Alissa McCurley.
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“It’s a piece of legislation that’s going to be very important to the revitalization of the foreclosure market,” McCurley said.
“We’re making a little click to (FHA 203(k) loan program), allowing investors to make the loan,” she said. It’s an expansion of the scope of the current program, she explained.
McKeon’s bill, called CASA for Communities Achieving Sustainability Act, authorizes the Housing and Urban Development to make 203k loans to small investors for a two-year period.
The bill uses the current framework of the FHA 203(k) program with additional stipulations, McCurley said, which include allowing the purchase of no more than four homes per year, as well as requiring that the outstanding principal amount borrowed may not exceed 90 percent.
In addition, after the two-year period, this authorization will terminate and it’ll be left up to HUD to change their regulations to allow investors to participate in the 203k program.
“Basically, it allows investors to purchase a home and make repairs that will help revitalize a neighborhood,” she said.
McKeon’s office is hopeful about the bill because of the bipartisan support its garnered, McCurley said.
McKeon will be at 20655 Soledad Canyon Road at the California Association of Realtors office.
The bill is called a “common sense and measured approach to assist small investors,” by the association’s government relations manager, Matthew Roberts.
“By expanding access to the FHA 203(k) program to these investors, who often live in and are personally invested in the well being of their community, neighborhoods will begin to benefit from an improved housing stock for both homebuyers and renters,” Roberts stated in a letter of support.
The following is a list of houses that qualify: tear-downs — as long as part of the foundation will remain, houses that need to be destroyed and rebuilt are eligible; existing construction that is at least 1 year old; single-family, two-family, three-family or four-family dwellings; and condos — if they have been approved for FHA loans; mixed-use properties — if you are repairing only the home portion, a mixed residential/commercial property can qualify. Homes needing to be moved to rest on a new foundation.
Here’s a list of repairs that qualify: The FHA has specific guidelines as to which types of repairs qualify for 203k loans. The lender will also stipulate which repairs you can make. Allowable repairs include: disability access; heating, ventilation and air conditioning; plumbing; roofing and flooring; energy conservation; kitchen remodeling; new appliances; room additions; decks and patios; bathroom remodeling; room additions or second-story additions ;New siding; finishing an attic or basement; and site grading.
Labor costs must be included in the loan, even if the homeowner performs the repairs. The repairs must be completed within six months.
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Source: Santa Clarita News