Conventional Rehab Financing For Investors and Primary

Jerry PadillaPoster

Lender
Rochester, NY

Posted July 23, 2017 21:39

Here at Prime Lending we offer 19 different rehab products for investors and primary owners, as well as second homes.

EZ-C Conventional Renovation Loan is a product offered only by Prime Lending:

Product Overview

To be used on Conventional loans for either required or optional repairs.
Repairs MUST be permanently attached to the property and add value.

NO MOBILE/MANUFACTURED HOMES

Primary Homes

-1-4 Units

-620 FICO Minimum (660 High Balance)

-95% LTV 1 Unit

-80% LTV 2 Unit

-75% LTV 3-4 Unit

Second Homes and Investment Properties

-620 FICO Minimum (660 High Balance on Second Home only)

-1 Unit - 80% LTV Purchase Only (75% LTV Refinance)

-2-4 Unit Investment Properties now eligible (75% LTV purchase/refinance). Standard Conforming Loan amounts only, NO High Balance.

Allowable Repairs or Renovations

Repairs/improvements must be permanently attached to property and add value
Cosmetic repairs only
- "Built-in" kitchen appliances

Conversions:

-Conversion of 2-unit to 1-units

-Conversion of 1-unit to 2-unit by exception only. Borrower must have prior landlord experience or qualify without rental income

Renovation Cost Limits

Up to $35,000 in repairs/improvements
- This includes the 10% contingency reserve
- Loan amount calculation is Sales Price + Bid + Contingency Reserve ONLY
  - Renovation fees CANNOT be rolled into the loan amount unless it is a REFINANCE and LTV permits.

Note: If cost of renovations exceeds 35k, the Borrower/Seller is NOT allowed to pay the difference at closing from their own funds. If maximum amount is exceeded use HomeStyle Renovation program.

Contingency Reserve

A contingency reserve equal to 10% of the total costs of the repairs/improvements must be established and funded for all mortgages to cover required unforeseen repairs or deficiencies that are discovered during the renovation.

Contractor Validation

Contractor is selected by the borrower and approved by the lender
Contractor validation will be completed by the Renovation Department
Maximum of three (3) contractors
General Contractor is preferred but not required
Follow state and local requirements for licensing of contractor(s). If a general contractor is not licensed for work that requires a license (i.e. plumbing, electrical, HVAC, etc.) obtain:
proof of the general contractor's liability insurance coverage of at least 2 times the total bid, OR
the license of the sub-contractor completing the work.
“Do-It-Yourself” Projects are NOT acceptable even if the Borrower is a licensed contractor.
Contractor on the project CANNOT be one of the following. (NO EXCEPTIONS):
- Borrower
- Borrower's employer
- Members of Borrower's family
- Seller
- Realtor involved in transaction
- Loan Officer involved in transaction

TEXAS PROPERTIES ONLY - It is important to remind the borrower that their contractor(s) will be required to attend closing

Renovation Programs by Primelending

HOMESTYLE® 1:
To be used on conventional loans for both appraiser-required repairs and repairs the borrower wants done to the property. They can be utilized on second homes and investment properties. The repairs can be structural in nature or cosmetic, but they must be attached to the property and add value. The only time appliances (stove and dishwasher) may be included in the renovation is if there is a full kitchen remodel including cabinets and countertops and the appliances (stove and dishwasher) will need to be built in/attached to the property.

FHA 203K FULL:
This is a government-insured loan that allows you to buy a home that is in need of major repairs and/or renovations. The repairs can be structural and/or cosmetic in nature. The lender loans you money to buy a home and complete repairs in a single mortgage. This rehab loan offers fixed rates with only a 3.5% down payment required. The home must be your primary residence. The FHA 203K is also available for refinance transactions.

FHA 203K STREAMLINE [203K(s)]:
This is similar to the FHA 203K Full loan, but is more limited in its scope. The repairs can only be cosmetic in nature and are limited to a maximum of $35,000. Because the repair costs are smaller, there is less red tape to get through, hence the "streamline" name. These loans can also be used to refinance existing mortgages and rehab homes.

EZ CONVENTIONAL:
To be used on conventional loans for both appraiser-required repairs or repairs the borrower wants done to the property. The repairs must be non-structural in nature (no exceptions) and they must be attached to the property and add value.

HUD REO WITH REPAIR ESCROW:
To be used on HUD REO listings only where the appraiser has required MPR (minimum property requirement) type repairs.

MINIMUM PROPERTY / APPRAISER / UNDERWRITER REQUIRED REPAIRS:
To be used on FHA financed loans where the appraiser or underwriter has required MPR (minimum property requirement) type repairs.

BUYER / SELLER FUNDED REPAIR ESCROW:
Can be used on an FHA or conventional loan. Can be used on a VA loan by exception only if the seller is funding the repairs. Repairs do not have to be appraiser-required but the appraisal must be subject to those repairs being completed.

POOL ESCROW:
Can be used on a conventional loan (finance or refinance) to include the cost of a new swimming pool.

USDA REPAIR ESCROW:
To be used on a USDA-financed loan where the appraiser has required MPR (minimum property requirement) type repairs. For designated rural properties, they are guaranteed by the Department of Agriculture. Benefits include financing up to 100% of the purchase price and no monthly mortgage insurance premium.

WEATHER-RELATED ESCROW:
Can be used on an FHA or conventional loan. These loans can also be used on a VA loan by exception only if the seller is funding the repairs. Repairs do not have to be appraiser-required but the appraisal must be subject to those repairs being completed.

JUMBO RENOVATION LOAN:
To be used on a jumbo renovation loan for either appraiser-required repairs or repairs the borrower wants done to the property. The repairs must be non-structural in nature (no exceptions) and they must be attached to the property and add value.

Feel free to reach out with any questions.

https://lo.primelending.com/jerry.padilla

We lend in all states: