I need a Mortgage Lender

[Ferdia Kenny]

Any advice for getting a mortgage lender for a 20% deposit on a purchase + renovation for a Philadelphia townhouse. I asked my Broker and he said he does not know any lenders that can do this. I understand that the Fannie Mae HomePath mortgage works for this, right? How do I get one of those?

[J Castro]

Hi @Ferdia Kenny, welcome to BP!
From a lender’s perspective, the main thing to clarify first is whether this Philadelphia townhouse will be a primary residence or an investment property (non-owner occupied) and whether it needs renovation funds included in the financing.

If this is an investment property with rehab work needed, a traditional mortgage or HomePath loan is generally not the right fit. HomePath is limited to specific Fannie Mae-owned properties and does not typically solve for purchase + renovation on an open-market deal.

The more appropriate structure in your case would be a Fix & Flip loan

A Fix & Flip (also called bridge or renovation financing) is designed specifically for this type of scenario:

• Covers both purchase price + renovation costs
• Short-term financing (typically 6–18 months)
• Based more on the after-repair value (ARV) than your income
• Flexible underwriting (credit and income less restrictive than traditional mortgages)
• Funds are often released in draws as the rehab progresses

With a 20% down payment, you’re generally in a strong position to qualify, depending on the deal, property condition, and exit strategy.

Exit Strategy Options (very important to lenders)

Once the renovation is completed and the property is stabilized, you typically have two options:

1. Sell the Property

• Refinance is not needed
• You pay off the bridge loan at closing
• You realize the profit from the flip

2. Refinance into a DSCR Loan (most common investor route)

• Long-term rental financing based on property cash flow (not personal income)
• Typically 30-year amortization
• Qualification based on DSCR (Debt Service Coverage Ratio) instead of W-2 income
• Allows you to hold the property as a cash-flowing rental

For a non-owner occupied townhouse in need of renovation, the typical path is:
Fix & Flip loan - renovate - stabilize - either sell or refinance into a DSCR loan

That structure is what most active investors use today because it solves both the acquisition + rehab challenge upfront, and then transitions into long-term financing once the property is stabilized.

If you’re trying to force this into a traditional mortgage product, it’s likely why your broker is running into limitations—this type of deal usually sits in the investment / bridge lending space, not conventional home financing.