I just refresh my web site. More content is coming…
Well not everything however…
Due to the continue upgrades and updates within People, Places & Things LLC as a “unique home solution”, we have divided our design business and home inspection business. For now on, any “Home Inspection, Home Modification or HUD 203K Consultant” information, news, blogs and other things “home services” can now be access at our new web site:
All things “design” will still be on this site and in the near future, look for more new and useful content on all things design.
More exciting changes are coming very soon. Enjoy.
I have gave my web site a modest update so I can give you more product content for you to perused and use. On the “Design Service” link, I added a picture gallery on some of my design work. On the “Home Service” side, I cleaned up some items from the last update in March 2012. As far a Blogging goes, look for fresh content on various topics starting in September 2012. Please I invited you to kick the tires and give me some feed back on what you see. More exciting updated are coming by the end of the month. Please click on the home link page to get started.
We have updated our “Home Services” site so we can give you more product content for you to perused and use. Please kick the tires and please give me some feed back on what you see. More exciting updated are coming. Please visit us at:
Part 4 is the final in the series: “Is your home “Aging-In-Place” ready?” Please comment if you have any questions and comments and please enjoy the blog.
Part 4 – Credit, credit and more credit
When we started this case study, I’ve talk about staying in your home as a viable solution. Design solutions, neighborhoods settings, etc… plays a vital part in the decision to stay. However, financial institutions have tightened the credit requirements for everyone and made property values decline. Let’s talk about the types of financing that is currently out there and how we can get access to it.
FHA, personal financing and reverse mortgage.
In order to get the loan so we can get the project started, we have start with what the client should have. The client should have at least 20% saved in their personal finances to used for a down payment for the loan. Look at this stat:
According to the Census Bureau, only 11.6 percent of Americans moved to a new residence between spring 2010 and spring 2011; the next lowest number was 11.9 percent in 2008. With home prices depressed and credit tight, Americans are less able to sell their existing homes at a profit or secure financing for a new home. That’s one of the reasons the client needs 20% down. The banks are not loaning monies like they use to. Now let’s look at the traditional financing…
An FHA insured loan is a Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. Most of us used this track to get refinancing so we can do remodeling or additions so we can stay in their home. Secondary financing, the Federal National Mortgage Association, commonly known as Fannie Mae, it is a government-sponsored enterprise. The corporation’s purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities,allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market.Lastly, newer types of loan, FHA 203k loan are growing in popularity. A 203k loans allow the buyer to roll in the costs of repair of single family detached properties, condominiums, town homes or small apartment facilities into the mortgage loan. The bank takes the “as is” market value of the property and adds the costs of repairs to the loan. Upon closing, the repair work is completed and the buyer can take possession of the property. The minimum amount of repairs required to utilize a 203k loan is $5,000 and the maximum is $35,000. This portion of the loan is added on to the primary note. In order to streamlining costly repairs for a property, a 203k loan can be used for modernization of an existing home. This is useful for homeowners who want to update a kitchen or bathroom in a home that they purchase. These loans can also be used for room additions or other home expansion projects.
Like it was stated above, because of the credit crisis, the client needs to have at least 20% down payment and a good to above average credit score to get financing that you can live with so you can enjoy your remodel home. You can secure financing from family members or co-workers, etc…
A remortgage is a form of equity release (or lifetime mortgage) that is currently available. It is a loan available to seniors aged 62 or older, under a Federal program administered by HUD. It enables eligible homeowners to access a portion of their equity. The homeowners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit, or some combination thereof. The homeowners’ obligation to repay the loan is deferred until owner (or survivor of two) dies, the home is sold, they cease to live in the property, or they breach the provisions of the mortgage (such as failure to maintain the property in good repair, pay property taxes, and keep the property insured against fire etc). The owner can be out of the home for up to 364 consecutive days (i.e., into aged care). Title to the property remains in the name of the homeowners, to be disposed of as they wish, encumbered only by the amount owing under the mortgage.
I hope this series on getting your home “Aging-In-Place” ready will give you something to think about before you decided on a course of action that will benefit you and your client. Like in life, these blogs are not “one size fits all”. Each case study should be different so please use this study as a reference tool. If you have any questions or comments, please post them.
Part 3 – Recommending a sound course of action
Let’s review the previous case study: The client’s 1940’s suburban bungalow home has two bedrooms, an entryway and a porch on the east side of the home. The kitchen, dining and living room are on the west side of the home. There is only attic space on the second floor. One family member has to move around in a wheelchair and needs to get around effortlessly. Their budget is modest.
Let’s take a real, good look at what we have…
First, let’s start off with today’s housing market. Due to the price of existing residential properties and the availability of foreclosed homes, the price point to remodel a home may be too expensive to do. The case study above has doors and a hallway that is too small to accommodate a wheelchair. The kitchen and bathroom needs to be updated to accommodate the family. The entryway has to be functional too. There could also be a larger or more modern home in the same neighborhood that could accommodate the needs of the family.
Let’s take a look at what we can do with the bungalow.
Option 1: Remodel the inner shell of the home…
Depending on the features, this may be the least expensive option. The upside, of remodeling the kitchen and bathroom, widening the door frames and adding a concrete ramp on the front door, it to achieve a viable solution. The client can save money by doing some of the work themselves. For instance, they can do the demolition of the kitchen and the bathroom.
Option 2: Adding an addition…
One of the downsides of option 1 is to widening the doorways to a 3 foot solution, may go into the structural wall, adding an unexpected cost. By adding an addition to the home, the client will have solved couple of design solutions. Adding an addition on the rear of the home (say a 12 foot by 12 foot footprint) will create a new accessible entryway and a master bedroom. One of the bedrooms will be converting into a master bathroom and closet to make it comfortable for the client and caregiver to navigate around the home. Also remodeling the kitchen and a modest upgrading to the existing bathroom will help achieve a viable solution. The cost of the addition can double or triple the cost of option 1, depending on material.
Option 3: Look at a new home…
Nobody wants to move out of their home but in reality moving to another home that will fit your needs maybe an attractive option. The cost of a home is at the lowest price point in history. With a modest renovation, you may save and get a better home than what you currently have. You can stay in your neighborhood or find another community altogether.
Of course, none of these things matter if you cannot get the loan.
Part 2 – Inspecting your current environment
As a “Design Professional”, it is much easier to design an Aging-In-Place (AIP) solution for a newly created design home. For instance, the first thing I have to find out from this client is how long he/she will be staying in their new home and then all I have to do is incorporate an AIP design solution that will fit their needs.
For an existing home however, it’s very different…
Here is a case study: A client wants to stay in their 1940’s suburban bungalow home. It has two bedrooms, an entryway and a porch on the east side of the home. The kitchen, dining and living room are on the west side of the home. There is only attic space on the second floor. One family member has to move around in a wheelchair and needs to get around effortlessly. Their budget is modest and the client has not been in this situation before, so they are cautious. As a design professional, what would you look for when you inspect this client’s existing environment?
The Inspection Phase
During the inspection phase, we have to be compassionate, but honest with our clients. Their home has many memories that we cannot ignore. Our objective as design professionals should be to educate our client, not just selling them a product to stay in their home. Let’s look at the case study above. There are some questions that have to be answered in order to design a quality product. The first question, is it worth investing in the client’s neighborhood? The client needs to know if they will be able to recoup their investment if they need to sell their home. Second, look at the condition of their home. For example, the home may have hidden dangers, like termites or rotted wood? What if the home has a poor maintenance record or needs to have a lead mediation? These kinds of things will eat at the cost of the remodel.
Let’s look at another issue from the case study, the family member in the wheelchair. Coming up with a design solution for both, the member in the wheelchair and the client is another thing to consider, when deciding on whether to proceed with the project. Their input will give us design professionals more insight on how we can design a solution for them.
Investigating all possible scenarios is our job.
If it can be done, go for it. If not, then don’t do it. Do not be afraid to walk away from a job, when you and the client cannot see eye to eye. Coming up with a clear, viable design solution is critical.
In the end, pretending that we can save their home no matter what; may not be good for you or the client.