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Current reno/rehab/construction loan options

Construction/renovation loan options are limited at the moment. Below is a synopsis of the current landscape. Meanwhile rates are back to May levels, purchase volume is up, affordability is up, and prices are still declining - Sounds like the basics for a good market are here. Make it a good week folks! - Paul

The most popular reno/rehab loan is the FHA option 203(k), available for owners and purchasers. Basically, as long as the foundation remains in place (you can still expand the footprint of the house), it is owner-occupied property, and the applicants qualify for an FHA loan, it's a go. Prospect Mortgage is an active 203(k) lender.

Outright construction loans are tougher to get approved on conventional terms. Fannie/Freddy are not buying them at the moment, and portfolio loans cost more, so it can be expensive. Yet in many cases it involves the acquisition of distressed property so the additional expense is offset by profit. If it involves owner-occupied property I will also arrange the permanent loan up front, so the borrowers are sure they can refi when the property is finished and not get stuck in a high interest loan!

Homepath mortgages are an option, but only for Fannie Mae owned property. Prospect Mortgage is an approved lender under the program. Fannie cooperates with realtors. Great deals and currently the best financing options for investors! Check the details here.

Developer financing is available for financially strong and experienced borrowers. Loan- and cost-to-values, structure, and cost of borrowing span a wide range.

Personal credit scores are valuable: Higher scores means more options and better pricing. Above 700 is a good thing. Below 660 I often recommend credit make-overs.

Available

- Direct lender for FHA, Fannie, Freddy, VA, USDA, Jumbo, and other loans

- Same day loan decision (pre-approvals)
- 30-day closes (45-days for FHA)
- Condo (conversion) financing services. Information

- FHA loans down to 560 Fico

- 50-70% LTV stated income loans (600-700 Fico needed)

- 90% LTV Fannie Mae condo loans

- Loans for non-residents

- Rehab and construction loans

- Non-warrantable property loans

- Reverse mortgages

- Commercial loans

Contact me for excellent service.

____________________________________

"First say to yourself what you would be, then do what you have to do"
Epictetus (AD 55 - AD 135)

Posted by Paul Luykx on 08/23/2009 01:30 PM

Comments (2)

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2 Comments on Current reno/rehab/construction loan options

AUG

Thanks for the info. Always good to know what is happening in the world of loans.

SEP

I agree with you on the FHA 203(k) loans as they are a great way for home buyers to take advantage of all of the REO's that need some repair. Without this product, these types of properties would be limited to cash investors or people buying them for their primary residence with plenty of reserves after the loan closes to do the rehab out of pocket. the 203(k) is a great product to allow buyers to finance these costs, all with one closing, FHA insured loan, minimal down payment, and low interest rate! This is a very popular product for us as well down here is Florida as most lenders are unable to offer them, we are still actively doing them like yourself.

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