Ok, I have a house I’m looking at that needs some serious rehab. How do I find a full doc or stated income rehab loan requiring as little money up front as possible, with no seasoning issues?
Most traditional banks have good rehab contruction loans. although you may get only 65-70% of value. Try Jp Morgan Chase, countrywide, or IndyMac Bank.
I have completed two rehabs and I am currently working on the third, so far I have been reinvesting the money I have made back into my current project. My personal expriences have been that traditional banks in my area are very hesitant to do rehab loans. My credit score is resoanable at 650 right now. My biggest problem has been that I left my full time job to do rehabs and traditional banks don’t like that.
Make sure and have your funding lined up before you start. The financing has been one of the biggest struggles. I am currently working with an out of state lender and things are starting to go more smoothly. You really have to make a commitment once you find the right property. Many people sit back and keep talking and never doing.
Has anyone had any experience with the HUD 203K rehab loans? I have just read a little bit about them.
Your rehab really depends on what type of property you are going to buy. (owner occupied vs. investment, 1 unit vs. 4 unit.)
What are you trying to achieve by doing this rehab?
There are lenders that will loan 100% of the cost to purchase a building + 100% of the rehab $.
These lenders are great for unexperienced rehabbers that have GOOD (doesn’t have to be great) credit and some liquid assets. Or they can work well for the seasoned investor who is tapped out at the banks or has been told involved with too many projects.
Loans are usually based off of 65-70% of the value after rehab is complete. The money for the rehab is put into and escrow account and dispersed via a title company in draw amounts. The initial funds for the first phase are paid out by you and the lender will reimburse as the project moves along.
Monthly payments are typicall interest only, the loans are usually short term 1-3yrs, and if credit scores are high enough the first 6mo. of payments can be deferred and paid upon refi or sale of property.