Being a new investor and seeking financing for my first couple rehabs was having trouble obtaining conventional financing due to a sub average credit score. Probably somewhere around 550. I started researching hard money loans. Everything I read said hard money lenders did not check credit or scores. After applying with 2 hard money lenders. I was turned down both times after they check my credit. Any input here would be greatly appreciated and maybe some direction here. Thank you Mike
The majority of hard money lenders don’t report to your bureaus (unless to foreclose).
There are programs that would accomodate scores in the 500’s and others that disregard FICOs altogether for the equity/cashflow in the deal.
Regards,
Scott Miller
I hope you saw those reports and your scores. Now that you know your score you need to scour the HMLs for one that says they take 5XX and above. If they say they only take 6XX or above, ASK them if they know of any HMLs that will go down to whatever your score is. You need to ask for a reference from every hml you talk to.
Keep looking and… work on those scores in the mean time. I think the board everyone talks about is creditboards.com where you can learn exactly HOW to improve your score. Is that the right board everyone?
and as I continue my search for a HML, I found a lender that goes to 300 fico http://www.perisso.com/Hard_20_Money_20_Residential.html
One thing to remember is that if your looking for Rehab funds you will need to have at least a 630 FICO. If your scores are beneth that then you will not be able to get rehab funds. Don’t get me wrong you can get a loan to purchase but it won’t be for rehab.
Not to be a stickler, but I offer rehab funding (hard money) for investors with scores as low as 550 (and I am about to roll out a program in which scores are not factored into the decision).
Regards,
Scott Miller