Rehab Loans?

Question

Hi,

Are there loans available for rehab work or does rehab work have to paid in cash?

So if I have $30K cash, I need to factor rehab work as part of that $30K, meaning my downpayment should not be more than $10k or $20K?

Thanks!

Glenn Banks · Answer

FHA 203K and FNMA Homestyle are two loan products that allow you to borrow to purchase the property and will give you an amount to fund the rehab.

Jonathan Greene · Answer

If you only have 30k liquid total for downpayment, closing costs, etc., you might be cutting it way too close to really do anything. 15k is the bare minimum I suggest for reserves or oh no money on any project so that doesn't leave you a ton left to work with.

As @Glenn Banks said, 203k is probably your best option because it's an FHA loan and you can do low money down and the reno is baked in, but the reno is complicated. You need a 203k intermediary and contractor and that contractor needs to front money because they get paid in four separate draws.

Ty Loney · Answer

Thanks Glenn

Rehab Loans?

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