Hi ,
I am new to this board 
I have been searching for a lender to finance my rehab project and being unsucessfull. I will be holding this property for about 6 months …the condition of the house is poor.
I was wondering what is the best loan I can get < $80,000
with a FICO Score of 802 .Again NO DOC required.
Thank you in advance for any info you can provide.
Angela.
Welcome to the club! :party:
the condition of the house is poor
Define poor. What do you think it will appraise for?
What kind of LTV are you looking for in this scenario?
Welcome to the club! :party:Thank you :)
Well ,
everything needs updating…may need foundation repair .
it has been vacant for 15 years and it’s a 50 year old house.
only thing that can be salvaged is a recent roof.
90% LTV
Angela.
Are you trying to finance the rehab costs as well?
sorry .I have left out some info.
the loan amount is $80000.
I will be responsible for repair costs and additional costs.
don’t know if it has been appraised or not. According to real estate agent if the house is improved it will sell for over $225,000.
Angela.
Off the cuff I would say that this can be done, but your rate with a conventional lender is not going to be much better than what a hard money lender is going to offer. Checked my guide real quick and your looking at a rate around 11.99% and paying 3% in discount points…that does not count underwriting, title, processing, appraisal, origination. etc.
If the property is listed for $153,000 what makes you think that you can purchase it for $88,000?
ok thank you for the info.
where I got $90000? …seeing the condition of the house and what it needs to be done to bring it to a decent condition in relation to the neighborhoods I believe this is what is worth ,nothing more than $90000 …weighing in also the land value and my risk.
ANgela.
If the property is in that kind of condition, a conventional lender will not make a loan based upon the as-is value. The subject must be in average condition.
However, this sounds like a great opportunity to use a rehab loan. A rehab loan will be based off the ARV (after repaired value). The lender will allow up to about 65-70% of the ARV to cover the purchase + fix + closing costs.
Once the rehab is done the property can be converted into long term financing if not being sold.
These can be done by some lenders with very little information.
Hi
If the property is in that kind of condition, a conventional lender will not make a loan based upon the as-is value. The subject must be in average condition.Yes,exactly.
But that kind of loan you are referring to (rehabbing loan ) also requires that the work needs to be done by licensed professionals ,right? I am planning to do most of the work with the help of a friend. only major tasks such as plumbing , electric work and foundation repair will be done by a professional.
Also I don’t believe they offer No Doc type of loans.
Thank you for your response.
Angela.
Hi Angela,
Some conventional lenders require that a contractor does the work.
There are lenders who’s primary concern is only the ltv and usually dont concern themselves with who is fixing up.
This sounds like a very profitable project for you.
With a credit score that high and not needing to include the rehab costs in the loan you should be able to get a no doc conventional loan for less than hard money rates and fees. There are a few different Alternative lenders that will allow for a poorer condition property and NOO, no doc financing. I would expect that you could get a 2 yr ARM interest only No Doc loan for somewhere around 8.5-9.5% with conventional closing costs which are alot lower than hard money. Let me know if you’d like to give me a little more detail and I’d be happy to put together a more specific quote for your situation.
TDBFlynn
Hi,
Is it possible to have a preaproval letter for a certain amount without going into details how much is for purchase and and how much is for rehabbing?
The reason I am asking is because I have another property in my radar that would need the same total amount of money but with a different Purchase and rehab ratio. I hope I explained this clear enough.
Sorry :-[ but I don’t know how things really work.
Thank you.
By the way thank you for all the responses.I will consider them all.
Hi Angela,
Yes, you should be able to get several preapproval letters with different amounts.
I usually give my clients 2 or 3. This can help in their negotiation with a seller.
There are many lenders that use desk-top appraisals (computer generated appraisals). Such as Washington Mutual, E-Loan,Wells Fargo with a stated program, no-doc, no physical appraisal. Keep it simple to the lender, you owe a certian amount of money, your home is worth “x-amount”, your credit is good and over a 700+,How much can I borrow? Good Luck!!!