Rental Property Investor · Kansas City, KS · Member since 2016 · 114 posts · 57 votes
I am looking to aquire another 4 unit building to move into this year. The fourplex I will aquire will most likely need quite a bit of work.
I have looked at different rehab loan programs for 4 unit owner occupants and haven't found any. I have seen the home style and fha203k. However, the home style rehab mortgage only applies to 1 unit. I currently have an FHA mortgage that I want to keep with my current residence.
Should I get a conventional 5% down loan and a separate rehab loan? If any mortgage financing professionals or anyone that has done this let me know of any way I could roll the rehab financing into the conventional financing let me know!
Specialist · Marlton, NJ · Member since 2014 · 92 posts · 55 votes
7y
@Rodney Harris you could do this using a Fix and Flip program. I recognize you do not plan to flip it but all you would need is a refinance out of the Fix and Flip program within 12 months. Typical terms 10% down on acquisition and up to 75% of ARV (which if high enough could allow for 100% financing of the renovation budget). If ARV is right then you can just refi out into a conventional at the end of the project before the balloon payment comes at the end of the 12 months.
Lender · Glenview IL- CDLP NMLS#230554 · Member since 2015 · 2k+ posts · 747 votes
7y
@Rodney Harris 203k is good product for rehab. You can't get regular conventional loan if the property need some work unless its in livable condition and you can improve after purchase.
If you are planning to live in the property, you can go up to 4 units as a primary residence with an LTV of 75% including the estimated renovation costs.
Investors are only able to do 1 unit with this product.
Specialist · Marlton, NJ · Member since 2014 · 92 posts · 55 votes
7y
@Rodney Harris you could do this using a Fix and Flip program. I recognize you do not plan to flip it but all you would need is a refinance out of the Fix and Flip program within 12 months. Typical terms 10% down on acquisition and up to 75% of ARV (which if high enough could allow for 100% financing of the renovation budget). If ARV is right then you can just refi out into a conventional at the end of the project before the balloon payment comes at the end of the 12 months.
@Rodney Harris you could do this using a Fix and Flip program. I recognize you do not plan to flip it but all you would need is a refinance out of the Fix and Flip program within 12 months. Typical terms 10% down on acquisition and up to 75% of ARV (which if high enough could allow for 100% financing of the renovation budget). If ARV is right then you can just refi out into a conventional at the end of the project before the balloon payment comes at the end of the 12 months.
Hope this helps!
This is interesting I have thought about doing this, any program you believe I could do this with? I’ll look locally but I didn’t know if you knew of a particular lender that was good with this type of transaction