Austin, TX - Rehab & mortgage financing recommendations

Buying & Selling Real Estate
4yFollow

Austin, TX - Rehab & mortgage financing recommendations

Beth Zetzman
Rental Property Investor · Austin, TX · Member since 2020 · 3 posts · 2 votes

Does anyone have recommendations for rehab & mortgage financing options in Austin, TX? We are first-time home buyers, looking to buy a single family residence with an ADU. The front house needs considerable repairs before it can be considered livable so we need a rehab. loan on top of a mortgage.

We've looked some into HomeReady and 203k but I believe our financing amount and income make us ineligible (prop value $840k + $120k($) repairs, income of $137k).

1Reply
29 views

Most Popular Reply

Bryan Noth
Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
4y

@Beth Zetzman I recommend asking your agent first to get a general idea.  I mentioned a few above that I point out to folks when considering a highly distressed property.  After that it honestly comes down to the lender and the appraiser.  If the appraiser is diligent they can catch more, such as an addition with permits (happens frequently).  If they do a drive by appraisal or miss a deficiency the lender unfortunately lives in true ignorance.  

This is much more stringent with FHA and VA loans with the property appraisal and condition report, they will require the deficiency to be remediated prior to closing.

1Reply
See this reply in the discussion

7 Replies

Jump to latestLatest
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Beth Zetzman you should be able to do FHA 203k?

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    0Reply
  • Bryan Noth
    Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
    4y

    @Beth Zetzman

    Just to clarify, when you say:

    Is the house insurable in its current state?  A lender has specific requirements for being able to give a loan and a general guideline is that the home has to be insurable.  Common requirements are that there home has to have functioning roof and walls, utilities, toilets, etc.  

    0Reply
  • Beth Zetzman
    OP
    Rental Property Investor · Austin, TX · Member since 2020 · 3 posts · 2 votes
    4y

    @Jordan Moorhead, unfortunately, the financed amount exceeds the FHA loan limit for this property so not eligible for 203k. We'll be financing all but 80k of the total purchase and costruction cost (Around $860k) and limit here for FHA loans is $483,000 for single family or even $618,000 for duplex (which this isn't 'technically').

    0Reply
  • Beth Zetzman
    OP
    Rental Property Investor · Austin, TX · Member since 2020 · 3 posts · 2 votes
    4y

    @Bryan Noth, I'm honestly not sure - how would I find that out? Call an insurance agent? I know that the seller's agent is requiring a true construction loan to purchase the property.

    1Reply
  • Bryan Noth
    Realtor · Austin, TX · Member since 2016 · 1k+ posts · 1k+ votes
    4y

    @Beth Zetzman I recommend asking your agent first to get a general idea.  I mentioned a few above that I point out to folks when considering a highly distressed property.  After that it honestly comes down to the lender and the appraiser.  If the appraiser is diligent they can catch more, such as an addition with permits (happens frequently).  If they do a drive by appraisal or miss a deficiency the lender unfortunately lives in true ignorance.  

    This is much more stringent with FHA and VA loans with the property appraisal and condition report, they will require the deficiency to be remediated prior to closing.

    1Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Beth Zetzman get a hard money loan and refinance later. I'm doing a 10% down hard money for purchase and rehab right now

    [email protected]512-888-9122
    The Moorhead Team5140 Reviews
    WebsiteView Page
    0Reply
  • Ryan KellyBusiness Member
    Real Estate Broker · Austin, TX · Member since 2018 · 1k+ posts · 1k+ votes
    4y

    @Beth Zetzman I agree with @Jordan Moorhead you should focus on using private or hard money for the purchase, complete the rehab, then refinance into a conventional loan when the property is in updated condition. Depending on the current condition of the property, you may have difficulty finding a conventional construction loan.

    [email protected]512-674-5478
    Ryan Kelly Group - Keller Williams5110 Reviews
    WebsiteView Page
    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free