Investment Conventional loan penalty?

6 Replies

Hi BP, 

I am in the process of bidding on a HUD home and applied for an investment conventional loan pre-approval. After receiving the pre-approval I was informed that I can't flip the property and I would have to hold it for a year. What are the penalties if I sold the property early? I'm also looking into other financing options including hard money. This is only my second flip and I will admit I am afraid of hard money loans because I don't fully understand them. I've also considered a personal loan to cover the entire project from purchase to renovations but I'm still not sold on that due to the risks involved. Any support would be greatly appreciated.

I don't have all the loan details as of yet. I just have the pre-approval and the estimate to close worksheet. Their's a prepayment disclosed on the worksheet though. My loan officer told me that I would have to hold the property for one year if I used this loan. 

Ok, thanks I've already asked him he didn't respond with an answer just informed me about hard money lenders option. The bid closes in a week so I have to expidite finding a lender or I may lose the deal. ARV with a direct comp is 170K on an 70k investment. The comp is a month old in the same neighborhood down the street.

thanks I will do that!

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