Loan program targets distressed properties

Via Homes joins Sun American Mortgage in effort

by Angelique Soenarie - May. 28, 2009
Arizona Business Gazette

An east Mesa custom-home builder and a mortgage company are turning to a government program to sell and remodel homes.

Via Homes and Sun American Mortgage Co. are offering a loan called the Federal Housing Administration Section 203K loan, which bundles the purchase and renovation of a fixer-upper home into a single mortgage payment.

The home-loan program is geared toward rehabilitating distressed properties such as foreclosed-on homes .

Via Homes is offering a free seminar about the program from 6 to 8 p.m. on June 3, 6903 E. Parkway Norte. Call 480-830-2220 for more information or visit www.viahomes.com.

The loan includes the purchase or refinancing and rehabilitation of a home that is at least a year old. A portion of the loan pays the seller or, if the owner is refinancing, pays off an existing mortgage. The remaining funds are placed in an escrow account and released when rehabilitation is completed.

The total value of the property must still fall within the FHA mortgage limit for the area, and the cost of the rehabilitation must be at least $5,000.

In Maricopa County, a buyer can borrow up to $346,250 with 3.5 percent down for a single-family home.

Home improvements include kitchen, bath updates, new appliances, new flooring, roofing, painting, room additions, etc. Visit www.hud.gov for more information.

In 1984, Trudy Licano, established Via Homes, a custom-home builder, specializing in luxury homes in east Mesa.

Though demand for new build homes is slow, Licano said she is finding ways to stay in business. "We've done significant remodels anywhere from $50,000 to $250,000 with customers who are living in substantial homes," Licano said, adding that she also does commercial building.

"It's like nothing we have seen before. We thought a year ago it was like 1987 (recession). It was pretty deep and knocked out 90 percent of the contractors in the Valley at the time. When lenders stopped lending, everything came to a screeching halt, and it has been tough putting the wheels back on the trailer."

Licano began the remodeling part of her business seven years ago and said business seems to being picking up with more homeowners interested in updating their home.

"We added more to our toolbox," she said. "It's given us a chance to diversify."

Five years ago, Sun American Mortgage Co., a privately run business established in 1984, was mostly involved with conventional loans, but when the credit market collapsed, loans dried up.

"Last year, we saw that this wasn't going to go away and that it's a reality, and we started to diversify," said Judi Gustin, a senior loan officer for the company. She added that 70 percent of the company's business is now through government loans.

"We do a lot of these loans," she said. "It's becoming popular again. For years, we've been doing conventional loans 100 percent and now the conventional loans are gone."

The reason that this has become popular is because of the foreclosed properties that sit vacant and have a higher rate of damaged properties.

"The neat thing about the program is lenders do not allow homes to be sold that do not have basic health-safety guidelines, which means plumbing has to work (as well as) utilities and air-conditioning."

The company, a Housing and Urban Development-approved lender, is based at 4140 E. Baseline Road, Suite 206.

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