Rehab loan for a 2 Unit

Guest 0.10 Dollars($)

I am considering purchasing a 2 Unit property in rough shape and before I go ahead with an offer would like to find out about potential financing. I think the condition of the property will mandate that it has to be a Rehab loan.
The property will approx sell for about $115K and needs about $40K in repairs. I might move in there once it is fixed or just keep it as an investment. Also, I can make a downpayment of 20% or more and prefer a Stated Income loan.
Any suggestions, which lenders might do such a loan in PA and any advise on what program should I be looking for? Will this qualify for an FHA program?
Thanks,
Simon

larry · Joined: 27 Jun 2007 Posts: 2951 411.26 Dollars($)

Hi Simon,

Welcome to the forum.

As far as I know you cannot get more than 20,000 as a Rehab loan. But you need 40,000 right? And to get approved for a Rehab loan you will have to be a low income individual. So, check out in the Rural Development office whether you get approved for this loan or not.

Best of luck,
Larry

jenkin7 · Joined: 04 Jun 2007 Posts: 887 132.55 Dollars($)

Hello Simon,

I feel you can go for a construction-to-permanent loan if you cannot qualify for a Rehab loan.

In a construction-to-permanent loan the lender will finance the loan to construct the home and when you will occupy the home the loan will be converted into a mortgage.

Feel free to ask the community if you have any further query.

0.10 Dollars($)

Thanks for your replies.
Just to clarify and avoid confusion: I need a Stated Income, Renovation loan for the entire amount of the deal. That is $115K to purchase the 2 Unit and then another $40K to complete the repairs. So ideally I want to finance approx $124,000 (115K Purchase+$40K repairs=$155k-20$ Downpayment=$124K)
Any ideas which lenders should I approach and what specific type of program to look for?
Thanks,
Simon

larry · Joined: 27 Jun 2007 Posts: 2951 411.26 Dollars($)

Hi Simon,

Welcome back.

I think you may not get the Rehab loan. But can go for construction-to-permanent loan as Jenkin has also mentioned above.

BTW you can get No-obligation free consultation from the rated lenders and mortgage professionals in the community to know which kind of loan is appropriate for you.

Best of luck,
Larry

kpatrick · Posted: Sat May 03, 2008 8:21 pm Post subject:

Hi Simon,

FHA is not an option for you because they only do full doc loans on primary residences, BUT if you can put 20% down, and if you purchase it as a primary you may want to give it a shot b/c their debt ratio guidelines are larger than conventional ones so you may qualify. Doesn't hurt to check.

Other than that, I agree with Larry and Jenkin, that the const-perm is the way to go.

Kim

enriko · Joined: 05 Mar 2008 Posts: 61 16.64 Dollars($)

Hi Simon,

Welcome to the forum.
Honestly i think that what larry and jenkin said is probably your best option! Smile

All the best

brad · Posted: Tue May 20, 2008 11:14 am Post subject:

Simon,

At the moment the market for stated construction or rehab loans is pretty much un-heard of. Most if not all lenders have revoked any such programs. Mosy of the clients I deal with are going with unsecured loans in order to complete repairs if they can not verify income. Good Luck, I hope you find what you are looking for.

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