I am thankful to have found and become a part of BP community! As I am gearing up to score a deal on the first investment property, I would like to find out the Pros and Cons of Freddie Mac Renovation Loan. I'd much appreciate your input on this. Thanks!!
I'm gathering you're speaking of the 203(K) loan? If so, it's not necessarily a bad gig. It is time consuming to close, you have to use 203(k) approved lenders and contractors (if I recall correctly), you have to live in the property for a specified amount of time, and other requirements I can't recall. It can, however, be an awesome deal if done right. Lots of hoops, but not a bad program really.
@Chad Clanton Thanks for chipping in!
It won't be 203k loan as I won't be able to qualify as a non-owner occupied investment unit loan. Freddie Mac has a renovation loan program, very similar to FHA 203k but without owner occupied restriction and Wells Fargo is one of the lenders that carry it.
Lots of hoops... gonna be a wild ride?
@Aaron Chung , do you know precisely what the loan is called? I'm not familiar with it I don't think. As to the hoops, as with anything, if you can identify your next steps, you're good to go. Let us know how it goes!
@Chad Clanton It seems it's simply called Renovation Loan.
As I am finding a bit more and read some case studies on the loan program, it is going to be a good & interesting learning experience. Will certainly keep you posted! Thanks!
Hello, @Aaron Chung and everyone. This is a link to Fannie Mae properties that were foreclosed, so the government run program allows investors to purchase homes with a minimum downpayment of 10% without mortgage insurance, and principal residency is not required, which means investors are welcome. Foreclosed homes are sold as is and the purchase of the home must be done using one of their Fannie Mae listing agents. A 203k loan would include mortgage and the costs of the rehab.
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