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Cash for Keys

by Justin Willard

Cash for Keys

Recently our number of Cash for Keys assignments in Pembroke Pines and Southwest Broward County has increased significantly. So, I thought I would write a quick blog post to explain what cash for keys is and how the process works. 

Cash for Keys, or Relocation Assistance Money, is a tool that many REO Asset Managers utilize to incentivize the occupants to vacate the premises. Most of the time, this occurs after a home has been foreclosed on or acquired by the bank through some other means.  The process usually begins with the Realtor representing the asset management company or bank going to the home and posting a notice to the occupants.  The goal is to have the occupants contact the Realtor and make arrangements to meet and discuss a move out timeline.  During the meeting, the Realtor may offer a cash incentive, "Cash for Keys", to the occupant to move out by a specific date.  Once the Realtor and the occupant come to an agreement, a "Move Out Agreement" or contract is formulated and signed by both parties.  The agreement stipulates the timeline as well as all other conditions for the turnover of the property. Common conditions include leaving the home free of debris and personal property and in broom swept condition. The keys to the home must also be turned over to the Realtor in order to consummate the deal. 

On the day of move, out the Realtor will return to the home and inspect the property to determine if the occupant has complied with the contractual terms. If so, the Realtor provides the occupant with a cashiers check for the agreed upon amount and the occupant signs off that they received the check.  From that point forward the Realtor secures the property and notifies the bank.

If you would like to know how you can avoid foreclosure in Pembroke Pines, click on the following link: www.dadebrowardshortsales.com  

 

 

Neighborhood Stabilization Program (NSP)

by Justin Willard

Miramar Stabilizatoin Program

One of our clients, Tikisha, just purchased a home through the City of Miramar’s Neighborhood Stabilization Program.  Using the NSP Tikisha was able to purchase a foreclosed home inside the designated Redevelopment Zone established by the City of Miramar.  The NSP purchase assistance funds she received enabled Tikisha to purchase a home for her family that would have otherwise been financially infeasible. The NSP provided Tikisha with a $60,000 forgivable loan and paired her with Wells Fargo who issued her an additional $60,000 FHA loan at the very competitive rate of only 4.7% interest fixed for 30 years.   As a result, she was able to leverage herself and obtain a total of $120,000 in loans to purchase her new home.  The purchase assistance loan that originated through NSP will be completely forgiven as long a Tikisha resides in the homes as her principal residence for the next 15 years.  It gets even better!  In addition to receiving 50% of the purchase price of the home in Purchase Assistance Funds, Tikisha will also receive up to and additional $60,000 in renovation/ repair allowance from the City of Miramar. The NSP repair funds can be used to affect repairs such as code violations, energy and water efficiency improvement (green improvements), health and safety issues, electrical and mechanical systems, appliances, and general home repairs.   

We will be checking back in on Tikisha in the next few months to see how the renovation of her new home is going and to get her personal perspective on how the City of Miramar’s NSP program has benefited her and her family.  Stay tuned!!

Currently the cities of Miramar, Pembroke Pines and Coral Springs in Broward County, Florida offer NSP funds through the Community Redevelopment Associates of Florida. If you would like to find out more about the Neighborhood Stabilization Program and the Cities that offer funds to purchase homes click on the following link to view an article I wrote about the NSP program.  The article contains links to the agencies to contact to learn how to apply for NSP funds in your area: 

Neighborhood Stabilization Program Article

Buying a Condo with FHA Financing

by Justin Willard
One of the questions we are most often asked is how do I buy a condo with an FHA loan.  Well the simple answer is find a condo that is FHA approved.  In order to do so you will have to located condos in the area you are interested in living in that are FHA approved. 
google map to real pro systemsThe best way to get started is to go to the FHA websiteand search for FHA approved condos in the zip code or city you want to live in.  Once you have determined which condos in your area have existing FHA approvals, you need to become familiar with them and make a decision as to whether or not you would like to live in the community.  You can get a better understanding of the community by first driving by the condo to see it appeals to you.  Then contact the condo's management company or Board of Directors and ask questions about the community.  Some common questions might include the following: How many units are in the community?  Does the community have security?  How many parking spaces does each condo have assigned to it?  Does the community have guest parking and how many guest parking spaces are there for the entire community? Does the condo allow pets?  Are rentals allowed? What percentage of units in the community are currently rented? One other thing you might do is ask a resident about the condo. People love to tell you all about the place they live.
Once you have determined which FHA approved condo you would like to live in you should contact your Realtor and ask him to send you information on any condos that are for sale in the building. If it turns out that there are not currently any condos for sale in the building you might want to ask you Realtor to set you up on an automatic search via the MLS to notify you as soon as  a condo gets listed in the FHA approved community. Doing so will allow you to be the one of the first to see new units as they hit the market.
After you have found the unit you like and are ready to make an offer be sure to double check the FHA status of the community with your mortgage lender.  Your lender will be able to check the FHA listing of approved condos and ensure that the community has an active FHA approval.  Once the FHA status has been double checked you are ready to make an offer through your realtor. 
The key is to  start with the knowledge that FHA loans tend to work best when used to purchase condos with existing FHA approvals. Trying to purchase a condo in a association without an existing FHA approval is often very challenging. So start your quest to purchase a condo with a FHA loan by stopping by the FHA Condo Appoval Website first.  Doing so will save you a lot of time and frustration. 

On January 7, 2010 Fannie Mae launched the new "Special Approval" designation for Florida condo projects that meet their new revised criteria.  The revised criteria has been set up by Fannie Mae in an attempt to get the Florida condo market moving again by reducing the difficulty associated with financing condos in Florida. 

Obtaining financing for condo projects other than those already on the HUD/FHA Condo Approved List has been very difficult up to this point.  This appears to have been caused by lenders unwillingness to finance projects that do not meet basic requirements including having no more than 15% delinquency rates and having a minimum of 6 months worth of operating budget in the association's reserve account.  Many condos in South Florida have struggled with this issue because their reserves have often times been used to float the buildings expenses while dealing with mounting maintenance deficiencies caused by owners not paying their monthly maintenance fees.  This problem has been compounded by the growing number of condominium short sales and foreclosures in the market.

The good news is that Fannie Mae's new Special Approval designation program may help to move condos from being un-financable to being able to be financed again.  In order to do so, Fannie Mae is undertaking a comprehensive review of hundreds of condominium projects in the Florida to determine if the condo meets the new revised guidelines.  The process will include assessing specific criteria more closely, including occupancy, home ownership, association dues, financial stability of the project and property condition.  Projects deemed to be sufficiently stable following closer examination will be granted the Special Approval designation, meaning lenders can originate and deliver mortgage loans secured by units in these projects to Fannie Mae.  Projects deemed eligible will be listed on www.eFannieMae.com as projects reviews are completed.  Then qualified borrowers wishing to purchase units in the approved condo projects will be eligible for financing. 

For more information on purchasing condos in South Florida contact the Willard Realty Team at 305-332-8330.

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Last Modified 5/19/2019