Your goals and story: My goal is to purchase a small homestead outside of Philadelphia and complete renovations prior to moving in. Due to the property being over 10 acres and needing repairs, I am having difficulty securing financing for the purchase & repairs. I can secure financing for the purchase but then not for repairs. I would like to do the purchase, repairs, and refinancing all with one lender if possible.
Type of property: 10+ acre farm with a 4 bedroom, 2 bathroom 2900 sqft home
Location of property: Pottstown, PA (Chester County, 40 miles outside Philadelphia)
Purpose of financing: Purchase the property, Renovate/Repair the home, Refinance into Conventional
Type of financing sought: Not 100% sure. I am open to suggestions.
Current or prior ownership of real estate: Currently rent an apartment. Owned a 4bd/2bath starter home from 2014-2017. Sold it due to work relocation.
Occupancy: owner occupied, personal residence
Value of property at present and/or your offer price: $300,000 offer price
After repair value: $475,000 - $525,000 (conservative comps in area)
Anticipated or actual appraisal issues: None, but not really sure what this is asking
Down payment or equity: $75,000 cash to cover down payment and closing costs
Source of down payment funds, if applicable: own funds and 401k loan
Income Source: salaried, 15 years in federal career
Gross monthly income (optional): $10,000 +/-
Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: $1,300 monthly rent, pay off credit cards each month, no other debt
FICO: Excellent, 800+
Credit issues: None
Additional details: The home is need of approximately $100,000 in repairs. The roof estimated repair cost is $32,000, I estimate the septic is $30,000 since it failed completely, and other repairs (windows, doors, paint, floor refinishing, furnace, electrical) to be about $30,000. Comps in the area range from $500-$550k for similar properties. This is my first post in BP Forums so I hope I got this right! Thanks for the help!
@Brian Leigh Sounds like with your downpayment, income and credit you shouldn't have too much of an issue. Have you tried the standard FHA 203k purchase + rehab loan? Being a federal employee , tried any federal credit unions?
Welcome to BP btw!
@Tom S. - the issue we keep running into is getting financing for the renovations. I have tried a credit union and the local ones would not touch a 10+ acre property. I tried Farm Credit which said they would loan 80% LTV on the current condition of the home. I will ask about the FHA 203k loan option. I didn't think I would get it because of the acreage.
@Brian Leigh Other than your credit union, what other lenders have you tried? How about a mortgage broker?
I have tried a local bank that was willing to lend on the property as a portfolio loan for the bank. The downside was that they would only do the purchase of the property. I reached out over the weekend to a mortgage broker who has the ability to do USDA, FHA 203k, and other types of lending. I should know more later this week.
you just have to do the search and make the calls there are plenty of non doc or sub non prime loans on top of agency debt and 203k loans etc.
@Brian Leigh What about a TSP loan for 50k then you just need 50 more for the rest of the reno, you could almost get that on a personal loan with no collateral. Good luck.
@Matt P. - We are using the TSP residential loan option for the down payment. We anticipate after renovations being able to refinance and repay the TSP loan along with all of the other loans.