These have become very popular programs with those who would like to take advantage of purchasing distressed properties and foreclosures at bargain prices and renovate them to either live in, keep as investment rental property or for resale (fix & flip) at a profit after completing the renovation project.
We can also assist you in purchasing the property; working with your realtor to structure your financing so that it maximizes your benefits. After prequalifying you as a borrower, we can provide you with a variety of financing options that may fit your needs.
If your property is owner occupied, there are several programs available including FHA 203(k) and Fannie Mae HomeStyle renovation loans with as little as 3.5% down. Another option for both owner occupied and investors is hard money loans. These loans vary by area and by investor guidelines and range from no money down to 70% LTV depending on the qualifications of the borrower, property type, loan-to-value, after repair value, etc.
Fannie Mae recently introduced what may be considered the best rehab loan for both primary and investment properties.
Unlike other rehab loans, the Homestyle mortgage allows you to include luxury items such as landscaping and swimming pools. The program is available for investment properties as well as primary and second homes. Up to 50% of the after repair value (ARV) may be used for renovation funds. Downpayment for these programs are minimum 5% for primary home, 10% for second homes and 20% for investment properties. Multi-unit properties are eligible, up to 4 units for both owner occupied and investment properties. Another feature is that this program may be utilized for refinances as well as purchases. While seller concessions are allowed for both primary and investor transactions, gift funds are allowed for primary homes only.
Another option is an FHA purchase mortgage which allows an escrow for repairs when purchasing HUD foreclosures needing repairs. These are generally intended for minor repairs costing less than $5,000. Using a combination of seller concessions along with a broker credit, it's possible to purchase and repair these properties with very little out of pocket expense.
For buyers needing financing for new home construction or purchasing builder spec homes, we have single close construction loans up to $417,000 in most areas and 625,000 in high cost areas.
If you would like to find approximate terms for your scenario, please complete the form below and we'll respond within 24 hours.