Hard money lender vs renovation loan through Fannie Mae?

[Lauren D.]

Hello everyone, 

I am familiar with using hard money lender for distress property that will need rehab. Has anyone heard about renovation loan provided through Fannie Mae/Freddy Mac? a lender mentioned it to me today, and I have been reading about it. For investors who are buying and renovating old properties, do you know what is the main difference between hard money lender and renovation loan provided through Fannie Mae/Freddy Mac? What are the challenges and advantages of this type of loan? Appreciate your feedback. Thanks

[Ben Stoodley]

Hey @Lauren D. from what I have heard, the rehab process is much more difficult with a Fannie/Freddie rehab loan. I would take advantage of these one some deals that you have plenty of time with (live-in flip, for example). All of these government loans are great due to high LTV and low rates, but they are very difficult to use in this industry due to slow processing and endless requirements/paperwork. It still comes down to what I tell all my clients - if you can make a bank loan work, do it. Hard/private money will always be here for the rest :-)