Frequently Asked Questions (FAQs) About HALO America

How can you help a credit challenged person buy a home?

HALO uses their investor network to temporarily acquire the home, renovate the home, and their partnership with Credit Evolution and Development allows a comprehensive strategic plan to overcome bad credit to help you qualify for a mortgage all in as little as 6 months or less.

Why enroll in Forensic Credit Bureau Auditing Program?

We provide a service that will look at every bad item on your credit report and verify that it complies with the law. We defend your rights and empower you through education, providing knowledge that can be used and passed on to future generations.

What is the Loan Pre-qualification Interview?

  • You must have a middle score of 550 or higher for a rehab property
  • No bankruptcies or foreclosures in past 36 months
  • Judgments must be satisfied
  • Must be current on all current credit obligations (e.g. car loan, utility bills, mortgage payments, credit cards, etc.)

Why save 3.5% of purchase price to deposit in escrow?

  • Escrow is a holding account where funds are placed until an offer is accepted on an approved property
  • The purchase price was previously calculated in your Loan Pre-qualification Interview
  • The figure of 3.5% is based in current FHA guidelines and is required to secure 30 year fixed rate FHA mortgage

For example: $100,000 home x 3.5% = $3,500 escrow deposit

Search for a home

  • Our Real Estate Division will provide a list of approved properties
  • You will select the location most to your liking
  • We will coordinate any construction or rehabilitation needed

Move in!

  • After construction is complete, all necessary inspections are done
  • A final walk-through is scheduled (You and the contractor are present)
  • Occupy your future home

Complete Credit Program

  • Accomplish a credit score that will allow you to qualify for a mortgage
  • Close on your home

Why would someone buy a house for me with bad credit?

Real estate investors buy homes at a discount and they sell them for a profit. HALO is giving our investors a willing end buyer with their profit already built in upon acquisition. This is very attractive for a real estate investor because they know that the only hurdle that needs to be completed is helping your credit score qualify for an FHA loan because all the other requirements have been met.

Can I buy my house that I am renting in now?

You would be able to arrange for the purchase of your house you are renting now provided that your landlord is going to sell the property to us at a discount. Therefore, this creates an incentive for our investors to buy a home for you.

What happens if the house I select needs repairs?

HALO investors will pay for all necessary repairs to be made for your house to pass a strict FHA inspection, most likely there will be new carpet, fresh paint; if kitchen or bathrooms need updating to enhance value then we will look at that situation on a case by case basis. HALO will not buy any houses that have structural issues. HALO will also include a home warranty on the houses that our client purchase in the program.

As home values have continued to decline over a two-year period, the timing couldn’t be better for renters to delve into the realm of home-ownership. The National Association of Realtors recently reported that the median home price in the United States peaked in 2006 at just above $230,000. Today, the median home price has fallen over 25% to well below $175,000. If this weren’t enough, current mortgage rates are still hovering near historic lows.

Why are you considering buying me a house?

We are Real Estate Investors, meaning that we make a profit by buying a property at a discount and selling the property for what it is worth.

How do you go about finding a house for me?

We find out your preferred areas to live, desired bedrooms and bathrooms, preferred amenities (fireplace, basements, yard size etc). Once that is determined we make sure that your income level matches all the variables that you desire. We suggest you make a list of your needs versus your wants, it is very hard to find the perfect house!

How do you know the house is worth what I am buying it for?

When you select a house, we have a licensed appraiser determine the after repair value (ARV). This is established by looking at recent home sales and subject to certain repairs and upgrades. This is a future possible value, it is speculative and it is done only to determine if it makes sense for HALO to acquire the property.

Can you give me an example of what mean by saying “it makes sense” to do a deal?

We look for foreclosures that are bank owned, estate and divorce sales, fixer uppers, and any property being sold at a discount. A potential HALO deal would look like this: You are pre-qualified to buy a house for $100,000, we find a property for $50,000 that we are told by our appraiser to get the value of $100,000 we have to paint the houses interior, put new carpet throughout the house, replace the entire kitchen, new bathrooms, upgrade plumbing and electric. In this example our appraiser says that it needs these items done for it to justify us selling it to you for $100,000.
The cost for these upgrades to the property may have cost us $15,000; we cannot buy any property that needs more than 65% of the property’s worth in repairs and initial purchase price. In this example we cannot go over $65,000 between buying the property from the bank and doing the necessary repairs to get the after repair value. If there is too many repairs necessary to achieve the after repair value, we decline the property. We always do our homework on each deal that is presented to us prior to us committing the property.

Can I choose my own upgrades?

There are upgrades that are recommended by an FHA certified appraiser for the property to appraise at the after repair value.
We have a limited budget given to us on every deal to do repairs and upgrades, so typically we will provide you a list of repairs and upgrades that we will do to the house. If you agree you will sign off that you understand what is being done and anything outside of that list is your responsibility to be done. If you do not agree and want more than what is being provided then we will decline to do the deal. If there is additional contract work like finishing the basement if the property has one as an example can be done for an additional cost. Our contractors can give an estimate and you can pay the additional monies for that to be done while your house is being ready. You must use our contractors since we know they are licensed and insured.

What is a lease option and how is it different than a lease purchase?

A lease option is a rental agreement with a pre-determined price for the house that you can buy the property. You do not have ownership rights, until you exercise your option to purchase the property and you qualify for a mortgage. The down payment or option fee is the 3.5% you provided to us when that you put in the escrow account, it is the same amount of money necessary to satisfy the current FHA down payment for a home purchase. That fee is given to HALO to purchase a property on your behalf in the future when you are credit qualified. You have a 6 month option period to buy the house, if the credit department has not done their job to get your scores high enough to qualify for a mortgage then your option period is extended month to month. This would be a very unusual circumstance since HALO consults with the credit department extensively to have a plan of action to get you qualified in a 3-4 month period.
If you as the client damage your credit further by paying bills late or ignoring new collection notices and new bad credit occurs, we reserve the right to sell your property to someone else. If this occurs you will lose your option fee. A lease option also allows you to walk away from a property if the value drops unusually due to the market; in that case you are not locked into doing the deal.
A lease purchase, you are on the deed of the property and no matter what you must buy the property, pay property taxes, responsible for any and all your own repairs to the house, and if the property value drops you have to buy the property. We will not do any lease purchases mainly because to evict you we would have to foreclose on the property rather than go to Landlord Tenant court. The lease option is a cleaner way to do the deal, if you are following directions you will have nothing to worry about and you will make a very short transition to leasing before your home is permanently yours.

Are my lease payments going towards the purchase price of the home?

Yes, every payment is applied towards closing cost, on average a typical real estate closing can have up to 6% of the property’s purchase price which includes taxes, title fees, mortgage fees, attorney fees. As long as you buy the property at the pre-determined price, we will cover all closing costs. (Does not include transfer tax).

How long do I have to lease before I can own my house?

That depends on how your credit improves while you are in the house, remember that this process heavily relies on your ability to follow directions and communicate with HALO and the mortgage department. We have a third party who will do your mortgage, and when it is time for your loan to start they will deal with you directly. We aim for 120 to 180 days maximum to close on your loan.

Explain the relationship between the Realtor, Mortgage Company and the contractors who did the rehab of my house?

All of the individuals you deal with throughout the process with the exception of the credit and the initial gathering of your real estate documents will be handled by non employees of HALO America. At any time during the process if you feel that you are not being treated professionally contact our office immediately!

I was promised something by one of your staff members during my enrollment period?

HALO America prides itself on setting the right expectations for all of our clients, ANY promises must be made in writing and signed off on by management. There will be no verbal commitments! Never.

I am confused about the process. Is there any way that I can get a consultation?

Yes, before you arrange for your escrow deposit you get a consultation to give you an overview of the entire process. If you want more information prior to that, please start with this web site (www.haloamerica.com) as there is plenty of information and videos to educate you. After you review the web site, you also have the option to schedule a conference call. If you still require more information then you can arrange an appointment with the office.