Hello all,

I am currently looking at a property that doesn't seem to need too much work. It is an older home and really just needs updates in kitchens like counters and a few appliances. Some paint and a deep cleaning. It has 3 units and each would need the work.

I'm stuck on whether I should use a hard money loan or just go with 203k to complete these renovations? What are your thought's? My initial assumption is that the Hard Money could cost me more than just lumping everything under one loan. 

If anyone can help me break down the Pro's and Con's it would be much appreciated!

Thanks in advance!

@Brian Hatcher

Do you plan to occupy the property?

203K loans are FHA loans and are for owner occupancy only.

@Christopher Phillips Yes, I will occupy the property.

If you're living in it, and can qualify for conventional financing, and you can actually close on the deal with the 45-day bank timeframe, then you should always go for the 203k loan because that's the cheapest loan with the highest leverage you can get.  Most people can't do all 3, so they often go the hard money route.

HML lenders will Not lend to an owner occupant. If you are going to live in one of the units, either 203k or conventional Homestyle.

@Brian Hatcher

What everyone said, if you're going to occupy it then your choice is the 203K or similar rehab loans for owner occupants. HMLs generally will not do it for owner occupants.

Take a look at the HomeStyle Renovation product offered by Fannie Mae.

https://www.fanniemae.com/content/fact_sheet/homestyle-renovation-product-matrix.pdf