Rehab loan on 4-unit property

Hi, the broker I’ve been talking to just threw up her hands when I gave her this scenario, so I’m trying to figure out if I’m crazy or if I just need to talk to someone different. Any advice would be great.

Currently listed as single family – but it’s 5,000sf near center city Philadelphia, so 4 units makes sense. Listed at 275k and it’s basically gutted now. Estimating 425k and probably a year to rehab. So that’s 700k. Still working on ARV, but let’s call it 1 million.

2 borrowers, both 640-ish FICO. Planning to owner-occupy one unit, rent the other 3 and hold it long-term. Need a rehab loan where we can include a reserve to pay mortgage until it’s finished. Decent income, though we’d need to count the rents from the 3 units. Coming up w/ 5% (of the 700k) would be rough but possible so we’d need seller to pay closing costs. Have some trusted contractors as well as a live-in brother with lots of construction experience.

These numbers could go up or down – maybe rehab is only 375k, maybe we only offer 225k, maybe it’s worth 1.2m when we’re done. I’m working to nail it all down, but right now I’m just trying to figure out whether we’ve got a shot at finding someone who would consider something like this.

Thanks so much for your help.


It’s possible to use a ARV based loan to do the conversion, but I’d need to know more about you, your FICO, income and assets.

If it turns out to be plausible, you wouldn’t need to put anything down and could use your cash reserves for mortgage repayment and advancing the cost of rehab whilst waiting for escrow reimbursement.

If you have a 640ish FICO, you would need to go FULL DOC with the program I have in mind.


Scott Miller

Thanks Scott. I’m sending you an email w/ a bunch of details.