Financing a mortgage under $30k

21 Replies

The conventional minimum loan amount is $50,000. A conventional loan is a loan that is edible to sell into Fannie/Freddie. A small community bank or credit union might have a smaller loan amount which they portfolio. In both cases, it is a very very small group who are less than the $50k. The group is microscopic for less than $35k.

You might have to approach this a little different and see if you can offer up more than one property to get into a higher loan amount. Best bet for an out of the box structure or flexible structure will be the local banks or a private lender.

We have purchased 3 properties at or under $30,000 this year and 3 that were between$30,000 and $35,000. You might want to try a local bank, that's what we did and had no problem gettings loans that ranged from $15,000 to $34,000 along with a line of credit for rehabbing. Good Luck to you :)

It's nice that you have those under 30k properties in Florida! What area of FL specifically are you looking at?

Another thing you might want to look into is peer to peer lending I know there are at least a couple of threads on that here, and people that have used those services successfully.

Of course interest will be higher than a traditional mortgage loan, and a short term ...but it could work well for a flip. Might be tougher for buy and hold.

Also the advantage would be you would be more competitive because you would be purchasing with cash versus a loan. The seller will be more likely to take your offer.

For our last few deals we have found that "local" bank guy! This makes all the differance in the world. He does any loan amount plus rehab line of credit if needed. Also when I want to make an offer on a property he gives an approval letter very quickly. You will have to have a higher percentage rate. But ours is at 6.25 which is still great in my mind

Not sure if you are asking your question in a general nature or specific to a property you are interested in, but for smaller amounts such as that, it might be possible to get some owner financing, or all of it financed by the owner.

Originally posted by Dawn A.:
Try aimloan.com, their limit is $25,000.

quick search returned their site and each subsequent site was "complaint or buyer beware" warning.

I just called local banks and asked what they had to offer someone doing what we do. I also do 12 month interest only for that 6.25%. We start with 20% down for the purchase. Then give him an evaluation of the rehab costs. He will repay me the 20% after i return receipts to him then allow me to pull from the line for the rehab cost as long as i show receipts. It is a huge blessing to the business. Its not aways smooth there are bumps in the road on some deals but overall great asset to our team.

Guys I was able to secure a line of credit with a bank secured by 3 properties I owned outright. Maybe should shop around. What's a ball park figure of a construction line of credit to ask for and also is it usually secured or unsecured

Thanks for all your responses, this is great information. The properties I'm looking at are in the Palm Beach and Broward county in south florida. I'm work on building a relationship with a local banker. I'm going to look into one of the credit unions. I have a feeling they might be more flexible than most.

Originally posted by Berdens Julceus:
Thanks for all your responses, this is great information. The properties I'm looking at are in the Palm Beach and Broward county in south florida. I'm work on building a relationship with a local banker. I'm going to look into one of the credit unions. I have a feeling they might be more flexible than most.

I LOVE Palm Beach. I go down a couple of times per year. If you find a steal on a deal down there in the area, let me know. I would like to be on Lake worth or near Worth Ave. I know I am not gonna get a deal down in that area that I would get here in NE Ohio, but hey, never hurts to throw it out there. LOL!

@Berdens Julceus Alright I have seen posts regarding this several times. Not sure if the whole Fannie/Freddie 50k loan limit is a thing or not but I have a bank that will do loans with a 35k loan minimum. They may go lower but you get a higher interest rate below that. I’m closing Friday, my interest rate is 5.625 30 year fixed. My loan amount is under 50k. Only lender fee is 770 underwriting fee. The bank is US bank. They lend in almost or all 50 states. Only caveat is they only go up To 5 loans so if you got more this won’t work.