Rehab loans rules and Regs

Fellas, I’ve been out of the game for a minute. I’m here in Chicago and I’m looking to find the basic guidelines for rehab loans…Credit score, down payment, reserves. Things like that. I have a place I’m about to pickup for cheap and I would like to move it on to a rehabber without touching it and charge a couple of bucks premium.

In the Stoneage when I did stuff you needed a 620 Middle, 20% downstroke, and about 3months PITI cash reserves and it didn’t matter how many places you had. NOw I know most banks at least here, only want you to have 4 or less places, but other than that, any more tips…Also any recomendations. Purchase price for my buyer will be 115k and they will need to put in about 40k. ARV should be 195kish. thanks


There are still many ways to fund rehabs in which you don’t need 20% even. There are still rehab hard money lenders giving out loans.

Their regulations have tightened, even HML’s now want to see credit and some assets to pay their loan back initially. But the funds are out there.

I am still rehabbing successfully here in Chicagoland.


If I understand you correctly you are looking to wholesale a deal to someone that will come in and rehab and retail the property… Is that correct? I assume you are wanting to know how the rehabber is going to get the money to insure that you are going to be able to sale the property and make your money.

Not to worry. Although the belive of most investors is that 100% financing does not exisit anymore that is simply not true. I am aware of several hard money lenders that will lend up to 100% of the pruchase price as long as the property meets a certain after repaired value. Typically from the range of 65%. Most lenders are using as is value however some investor minded lenders are using after repaired value.

There are also some Hard Money Lenders that still do not care about credit score, cash reserves or anything else. The definnition of a hard money lender is really an equity based lender. Lending based on the equity of the preoperty rather than the strengh of the borrower. There are too many hard money lenders that have gotten away from this idea, however there are still some Hard Money lenders that understand it.

I hope that Helps

Ryan G Wright