Seller Financing and FHA 203k Loan | Creative Financing

Member since 2018 · 8 posts · 0 votes

Hello,

I am new this site.

I am looking at a property that the seller is willing to do financing - however the property need a lot of work. Is is possible and/or smart to buy the home through the seller financing and then get a 203k Rehab Loan to get the repairs ? How could I structure this to work ?

Thanks for any advice

-J

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Jeremy TaggartBusiness Member

Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 647 votes

@J. Broham If you can qualify for the loan I don't see why you would need the seller financing? Just use the 203k loan and get the rehabbed home for little out of pocket. Then if it is a good enough deal you could potentially refinance out to get it on a conventional loan and then rinse and repeat.

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Jeremy TaggartBusiness Member
Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 647 votes
7y
@J. Broham If you can qualify for the loan I don't see why you would need the seller financing? Just use the 203k loan and get the rehabbed home for little out of pocket. Then if it is a good enough deal you could potentially refinance out to get it on a conventional loan and then rinse and repeat.
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
You can’t do both.
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Andrew PostellPro Member
Lender · Fort Worth, TX · Member since 2016 · 8k+ posts · 6k+ votes
7y
@J. Broham I guess in theory you could buy the property with his loan, then immediately refinance his loan. That is, if the seller finance loan does not have any prepayment penalties. Also, keep in mind that since a FHA loan is designed only for primary homes that you would need to occupy the property. If you do not plan to occupy the property then the "conventional" loan type you would need would be a Fannie Mae HomeStyle loan. Hope this helps. Tag me if you have any other questions. Thanks!
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